How China's DeepSeek R1 Model Will Disrupt the AI Industry

DeepSeek R1 Model Rivals OpenAI at Fraction of Cost, Challenges US AI Leadership Michael Novinson (MichaelNovinson) • January 28, 2025

DeepSeek's efficiency breakthrough will have a significant but not seismic impact on the AI supply chain as lower training costs spur broader AI adoption.

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The China-based company has proven in recent days that state-of-the-art models can be trained at dramatically lower prices, challenging the notion that only billion-dollar budgets can deliver cutting-edge AI performance. DeepSeek proved that cutting-edge hardware isn't necessary for high performance, and their work could allow researchers and smaller organizations to build and deploy competitive models.

“To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient,” Microsoft CEO Satya Nadella said Wednesday at the ...