How DeepSeek is shaking up AI

From The Australian. Here's what's on the front. I'm Christinamiot. It's Wednesday, January twenty nine. Athletics Australia has lashed at the Western Australian Institute of Sport for its treatment of a pole volt coach who blew the whistle on sexual assault allegations. Chair Jane Fleming and CEO Simon Hollingsworth have called for the WA body to better support whistle blow

These world leading technology giants are announcing the formation of Stargate, a new American company that will invest five hundred billion dollars at least in AI infrastructure in the United States, creating over one hundred thousand are jobs.

Almost immediately about the same time, on the other side of the planet, a Chinese company called deep Seek unveiled an AI model it says can compete with market leaders like Chat GPT for a fraction of the cost. The world's financial markets reacted with shock and awe with Navidia, the world's most valuable public company and the maker of the computer chips most American AI models rely on bearing the brunt of it Well, shairs of Santa Clara's in video fell hard this morning on the popularity of a

That's the whole question, right, I mean ignoring the fact that a number of reports.

That I think it caught everyone off guard, even the best and brightest in Wall Street and in Silicon Valley.

Jared Lynch is The Australian's Technology editor.

They thought the US was miles ahead, not even miles ahead, thousands of miles ahead than China. They had a trade embargo on Navidia chips, the world's most advanced chips. And then the fact that China could produce at a far lower costs, mind you, an AI model that is almost on.

Par with chat GPT was extraordinary.

The AI model released by deep Seek is called R one. It's a generative AI platform similar to Chat GPT and Meta AI. Deep Seek is backed by Leoon Wen Fung. He's the manager of the eight billion dollar hedge fund high Flyer. The company says it forked out just under nine million Australian dollars to train R one, and says it did it without Navidia's top of the line computer chips.

Do you think time will tell?

There have been some analysts that have called bs to put it politely on deep seaks claims that is that it only cost five point six million US to train this model, whereas some US models have cost billions to train because there's just not enough data to show. Okay, how much does this cost to train? And how much do the data centers cost to run deep seats? So that's all unknown at this stage. At the moment, the market's caught up in Wow, China's actually delivered this AI model.

But the thing is we've got to.

Rewind the clock back a little bit to the fifties, to the sixties, even the early seventies, off the space race, the US against Russia. That didn't result in a pullback off investment. I mean, competition rarely does it becomes a battle. Billions of dollars, trillions of dollars get poured into gaining the upper hand, and that is what we're going.

To see in the AI race.

What the response has been, more broadly, is this is very much now game on. China is saying to the world that it can compete and at a far lower cost. In fact, that's almost embarrassing to the American companies which have spent billions and billions of dollars of investor funds on developing and training these sophisticated AI models.

Deep six founders say they've tested are one against models from open Ai, which owns chat GPT, and they say it holds up. Jared, You've spent some time in the last week playing around with deep siks are one AI model. What did you think? Is it actually good? Yeah?

And the most part it is it works just like chat GBT, in some cases even better. It provides lengthy, balanced explanations to queries. For example, if you say if Trump is a good leader, it'll say whether he's a good leader is subjective. Here's some arguments, or here's some arguments against. Here some neutral arguments, and this is a conclusion. So it sort of directs the user to make up their own mind.

The problem is.

It's AI veers into what I call autocratic intelligence, and by that I mean it acts as an extension of China's Communist Party, because if you ask any questions about China, it adheres to China's censorship laws. So if you say, what is the Tianaman Square massacre, it'll say, sorry, that's beyond my current scope.

Let's talk about something else.

So it's very much a pro China model, or as I like to call it, autocratic intelligence.

Do you think that, in adhering to the Communist government's rules around censorship, Deep Seek could actually count itself out of this race before it's really even begun.

Well, I don't think many people will realize because on the whole it will act like a chap GBT. Why it matters when people ask questions about China is that is where people are getting their information. I mean, we used to have libraries, and then Google came along and people got their information from Google, and now increasingly people

Coming up? What next for the AI race? Back in the White House, an advisor to President Donald Trump reportedly said the cheap generative AI model released last week by deep Seek was one of the most impressive breakthroughs he'd ever seen. In many ways, it's an escalation in the competition between the United States and China to win the AI race, a fact Trump was upfront about at the Stargate announcement.

This monumental undertaking is a resounding declaration of confidence in America's potential. What we want to do is we want to keep it in this country. China as a competitor and others are competitors. We wanted to be in this country.

So as Deepzick races to the top of app stores around the globe, what happens next?

Here's Jared Lynch, Well, it shows now that the US no longer has the monopoly on AI development. In China, we've seen strong entrepreneurial culture which has created some of the world's biggest companies. Just look at Ali Barber for example, And now people are saying, wow, we can do the same with a bit of an ounce there is another way to be a disruptor, and we no longer have

Elsewhere, and especially in parts of Europe, deepzek has been welcomed with open arms by developers who say it's put them in a position to compete. And just lastly, Jared on the flip side, does that risk creating a marketplace where small are already established operations actually can't compete or is that just natural selection?

I think it'll be a bit of both. We're going to see some smaller operators be weeded out for a variety of reasons. Call that natural selection. And then we're going to see a wholely of smaller operators come up in areas that otherwise we had never thought of before, as we've seen with deep Seek. So we are entering uncharted territory, almost like the wild West. And it's been even made more so by Donald Trump's decision to rescind an executive order of Joe Biden's which gave the government

I've got your back because I.

Want the US to be the AI leaders, and that means we've all got to buckle up.

Jared Lynch is The Australian's Technology editor. You can read all our reporting on artificial intelligence and technology right now at the Australian dot com dot au