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🔆 Deepseek Reality Check: 5 Crucial Perspectives
An AI model is making waves, the EU AI Act is rolling out, and team Lumiera is going to Paris.
Emma G Moller & Allegra Guinan
February 06, 2025
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🗞️ Issue 56 // ⏱️ Read Time: 8 min
Hello 👋
When DeepSeek released its R1 model last week, few expected the shockwaves it would send through the global tech industry. A relatively unknown Chinese startup has managed to challenge Silicon Valley's AI dominance, wiping billions off tech stocks and raising questions about everything from national security to the future of AI development itself.
This event also creates an interesting backdrop for the AI Action Summit that gathers Heads of State and Government in 🥐 Paris 🇫🇷 later this month (we will be there, and will report back to you!). Now, let's take a step back from the headlines and analyze what's actually going on – and what it means for the future of AI.
In this week's newsletter
What we’re talking about: How DeepSeek's AI model is reshaping our understanding of AI development, challenging assumptions about compute requirements, and sparking geopolitical tensions.
How it’s relevant: With a claimed training cost of just $5M (compared to the usual $100M+) and performance rivaling industry leaders, DeepSeek demonstrates that sophisticated AI development might be more accessible than previously thought – this challenges an industry dominated by tech giants.
Why it matters: This requires a reassessment of fundamental assumptions about AI's future: the necessity of massive computing resources, the effectiveness of export controls, and the balance between open-source and proprietary models. The implications extend far beyond technology into geopolitics, market valuations, and global innovation patterns.
Big tech news of the week…
⚖️ The first part of the EU AI Act came into effect on February 2, including AI literacy requirements and the prohibition of certain AI systems.
🖥️ Google has removed their pledge to not use AI for weapons or surveillance from the website.
📱 Does AI affect our memory? It’s a valid question to ask, and Nature Magazine is exploring the answers.
What is DeepSeek?
Let’s start with the fundamentals: DeepSeek is an AI model rivaling industry leaders, developed by a team of about 150 engineers in Hangzhou, China. What makes it remarkable isn't just its performance, but how it was achieved: the team claims to have built the model while spending just $5 million on training, compared to the typical $100 million+ required by major AI labs. The model also has open-source elements (but is not fully Open Source, despite what some media outlets are claiming), allowing anyone to examine and build upon their work.
The emergence has sparked intense discussions about the global AI landscape. Today, we will take you through some of the key topics: The Geopolitics, the AI plateau discussion, the market trembles, the allegations on OpenAI training data, and the performance (benchmarks). Let’s go.
5 things to know about DeepSeek:
1. The Geopolitical Dimension
While DeepSeek operates independently without apparent state backing, its success has significant geopolitical implications. It has sparked fears in the U.S. national security community that the United States’ most advanced AI products may no longer be able to compete against cheaper Chinese alternatives, along with other questions relating to the U.S./China rivalry.
The model's responses on sensitive topics reflect China's information control policies, raising questions about its global adoption. However, the bigger story might be how DeepSeek challenges assumptions about technological innovation – demonstrating that breakthrough AI development can happen anywhere, potentially reshaping the global AI landscape.