This is HUGE. All these big tech US companies that spent hundreds of billions on AI to build out their systems are unlikely to get the returns they were hoping for. Now most will probably stop those huge investments and use this free open sourced model. Not good for Stargate but also for OpenAI and Nvdia and others.

“Here’s more from political analyst Arnaud Bertrand in a post on X:

Most people probably don’t realize how bad the news (about) China’s Deepseek is for OpenAI. They’ve come up with a model that matches and even exceeds OpenAI’s latest model o1 on various benchmarks, and they’re charging just 3% of the price. It’s essentially as if someone had released a mobile on par with the iPhone but was selling it for $30 instead of $1000. It’s this dramatic.

What’s more, they’re releasing it open-source so you even have the option – which OpenAI doesn’t offer – of not using their API at all and running the model for “free” yourself.

If you’re an OpenAI customer today you’re obviously going to start asking yourself some questions, like “wait, why exactly should I be paying 30X more?”. This is pretty transformational stuff, it fundamentally challenges the economics of the market….

So basically, it looks like the game has changed. All thanks to a Chinese company that just demonstrated how U.S. tech restrictions can backfire spectacularly – by forcing them to build more efficient solutions that they’re now sharing with the world at 3% of OpenAI’s prices. As the saying goes, sometimes pressure creates diamonds. @RnaudBertrand”

The one point I will take exception with the author is about how much of China’s gains was from innovation and how much was from stealing the wesst’s technology and buying it through means of bribes and Biden and Co.’s treason? https://www.unz.com/mwhitney/chinas-deepseek-bombshell-rocks-trumps-500b-ai-boondoggle/