DeepSeek’s AI Breakthrough: Revolution?

With bold claims of a $6M development budget and rivaling OpenAI, DeepSeek has the tech world buzzing. But is it truly a game-changer or an overhyped mystery?

Originally published on Substack on 28th January 2025

In 2025, the landscape of private mergers and acquisitions appears set for transformation, driven by a confluence of favorable economic conditions, strategic shifts, and an evolving Has DeepSeek's AI model stopped the U.S. tech industry in its tracks? Or is it too good to be true?

Seemingly built on the tightest of budgets, DeepSeek claims to be 'THE' major AI breakthrough and it is safe to say it's been an exciting few days watching this unfold. But is it really possible to build a top-tier AI model for under $6 million?

DeepSeek states its R1 model rivals OpenAI’s and was crafted in just two months. They claim achievements even with restricted Nvidia chips, stirring disbelief in the tech world. As a result, Nvida's stocks have crashed 17% / $600 billion in 1 day - ouch.

However, some experts, like Alexandr Wang of Scale AI, suggest access to more advanced chips than admitted. Others, like Ted Mortonson, feel the claims inflate capabilities achieved with the H800 chips. Elon Musk - of course - weighed in, amplifying these discussions with his own views. Trump says it's the wake up call the US needed.

How does DeepSeek's solution fit the puzzle? Their claim to building an AI model on a shoestring budget seems slightly misaligned with costs absorbed elsewhere. People like Gavin Baker highlight hidden figures behind the $6 million facade - prior research and access to prime resources remain out of the narrative.

As ever, the lesson lies in balancing skepticism with optimism. AI exploration beyond budget constraints might unlock transformative potential.

Either way, DeepSeek is truly impressive and a force to be reckoned with.

There is plenty of room for major winners in this race and is safe to assume that we will all have access to the same exceptional AI tools at some point. Meaning the opportunity for future entrepreneurs and existing businesses remains in using AI to help solve untapped user problems at speed and exceptionally effectively.

#DeepSeek