Kevin Roose
Appearances
The Daily
China Challenges Silicon Valley for A.I. Dominance
So, for example, if you ask DeepSeek to tell you what happened at Tiananmen Square or to say something mean about Xi Jinping, the leader of China, it won't do it. And I would not be surprised if in the coming weeks and months, we do see lawmakers in the US saying, wait a minute, we passed a law to ban TikTok. Why are we not also passing a law to ban DeepSeek?
The Daily
China Challenges Silicon Valley for A.I. Dominance
So I think that's one potential outcome here, but there's a key difference, which is that TikTok is not open source software. You cannot download TikTok and create your own version of it. And so already the DeepSeek platform models have been downloaded and recreated all over the world by lots and lots of different people and companies.
The Daily
China Challenges Silicon Valley for A.I. Dominance
I think what the DeepSeek story suggests is that it is going to be quite challenging to contain the spread of powerful AI without some big moves.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So there are people in the American tech scene who are calling this deep-seek moment the Sputnik moment for the AI race, because just as the launch of Sputnik by the Soviet Union kicked off the 20th century space race and created profound fear and anxiety among Western nations about whether they were behind, their biggest political adversary when it came to technology.
The Daily
China Challenges Silicon Valley for A.I. Dominance
A lot of people are looking at this moment with DeepSeek as kicking off a new era in the AI race where we really want to stay ahead of China. And there are people who say that having a lead in AI, if you are the United States, even if it's just a lead of a couple months or a couple years over your political adversaries is very important. And that may be true.
The Daily
China Challenges Silicon Valley for A.I. Dominance
But people who study AI, people who look at this industry closely, who are paying attention to the trends in AI, believed that these models would become cheaper and cheaper over time as well as becoming more powerful over time. So this really fits neatly with a lot of what people had been predicting for years.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Now, they might not have predicted that this sort of moment would happen from a Chinese AI company. They might not have predicted exactly what the breakthroughs would be that allowed for the models to get cheaper. But this is in keeping with the overall trend in AI that we have seen over the past few years, which is that the models keep getting better and they keep getting more efficient.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Goes to number one on the App Store charts. It vaults ahead of ChatGPT and all these better known apps.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Yeah, so that is what happened here, but just maybe a little faster than people had expected. But I think the larger point is that these systems are now improving so rapidly and in so many places all at once that I think it is only a matter of time before nearly everyone in the world has access to very powerful AI models.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And I just think that world looks a lot different than the one we live in today.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And the more notable thing, the thing that really caused the American AI industry to start to panic was how cheaply this model appeared to have been built.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So we think that this model cost DeepSeek about $5.5 million to train. Now, that might sound like a lot of money, but it's really not compared to what many of the American AI companies are spending. Meta said that it was spending $65 billion.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Microsoft says it plans to spend about $80 billion. Microsoft said it was spending $80 billion.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And OpenAI had just announced this giant partnership where they were planning to spend up to half a trillion over the next four years. As much as half a trillion dollars to build the infrastructure for AI. Whoa. Yeah, it's wild.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And on top of that, DeepSeek says that they built their model without access to the latest and greatest American AI chips, which up until now were thought to be necessary to build the most powerful models.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And so investors start saying, wait a minute, if it only costs $5.5 million to train a leading-edge AI model, then... What the heck are all these American companies doing spending hundreds of millions of dollars or even billions of dollars to train roughly equivalent models?
The Daily
China Challenges Silicon Valley for A.I. Dominance
And so the stocks of many of the American tech companies start to fall.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And so after all of this, people in the American tech industry start asking questions like, who is DeepSeq? And how are they getting these incredible models with so little money spent on them?
The Daily
China Challenges Silicon Valley for A.I. Dominance
So it depends who you ask, because there are a couple kind of overlapping panics that are starting to happen around this time. Of course, again, there's the investor panic. I mean, imagine if you had your whole portfolio invested in American AI companies.
The Daily
China Challenges Silicon Valley for A.I. Dominance
It would be like if you just bought like a very high-end sports car, like a Lamborghini, and you had been driving it around and were so proud of how fast it could accelerate and how well it handled. And then like some random guy shows up with like a soapbox car made of balsa wood, and it can go just as fast as your car. You'd be like, what the heck?
The Daily
China Challenges Silicon Valley for A.I. Dominance
Why did I just spend all this money on this Lamborghini?
The Daily
China Challenges Silicon Valley for A.I. Dominance
Yes. And then, of course, there's the geopolitical freakout because DeepSeek is a Chinese AI company. And there has been this race happening between primarily the U.S. and China for years about AI and AI supremacy. Who was going to be able to build the most powerful AI models before the other one? And that is a very important question for things like assessing the future of military conflict.
The Daily
China Challenges Silicon Valley for A.I. Dominance
If one country's AI is way better than another country's AI, they might have an advantage. In fact, the U.S. has banned the export of the most powerful AI chips to China for exactly this reason, to try to... sort of hobble the Chinese AI companies to keep them from catching up when it comes to building the bleeding edge models that could become very important.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So instead, DeepSeq had to kind of make do with these like Kirkland signature chips that are, you know, pretty good, but they're not the best. And so that combined with the amount of money spent really made people say, how do they pull this thing off?
The Daily
China Challenges Silicon Valley for A.I. Dominance
Yeah, so there are a lot of people who are skeptical of what DeepSeek has claimed. In particular, the cost of the model, $5.5 million might not be the real figure. It doesn't include all of the research and the engineer salaries and things that went into that, so that the real cost is probably significantly higher than that.
The Daily
China Challenges Silicon Valley for A.I. Dominance
But there are questions about, you know, did they smuggle in very powerful chips that would have actually allowed them to build a model this good? Hmm. You know, is there something going on? Is the Chinese government funneling money to them and not telling us about it? So there are lots of theories.
The Daily
China Challenges Silicon Valley for A.I. Dominance
But then as time wears on and people who are experts in this stuff start digging through the details, they're coming to the conclusion that, well, yeah, Maybe the cost is a little higher than DeepSea claims. Maybe they have a few more chips than they're telling us about. But in general, this seems like they actually just did build a really good model using some very clever engineering techniques.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So because DeepSeq did not have access, we don't think, to the most powerful chips that American companies are using... they had to kind of get clever about becoming more efficient with their model. I won't bore you with the technical details.
The Daily
China Challenges Silicon Valley for A.I. Dominance
It includes terms like mixture of experts, architecture, but basically they were able to use some clever tricks to squeeze the most power out of the chips that they did have.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Yeah, I mean, there's this saying in the tech industry that constraints inspire creativity. And that is definitely true here. DeepSeq did not have access to the best American AI chips. They did not have the largest budget or the most sophisticated team, but they were really scrappy and smart. They had a lot of really good young engineers and they were able to pull this off.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So what the AI companies in America are saying in response to this market panic is, look, we've still got to build these big, expensive supercomputers to stay at the forefront of AI, to have the best models. And if we take the techniques that DeepSeq has now shown are possible, these efficiency gains, We could have them too.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Think about how powerful our models would be if we put a billion dollars into the same kind of model that DeepSeek was able to make for much less. So that is what the American AI companies are saying. But I think there are real questions among investors about whether the scale of investment that they have been planning is really necessary.
The Daily
China Challenges Silicon Valley for A.I. Dominance
I think it threw into question this fundamental assumption that only the big dogs could play in AI. You had to be Microsoft or Amazon or Google if you wanted a chance to build the state-of-the-art AI models.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And I think what the Deep Seek story suggested is that there may be a whole other world of competitors out there trying to stay close to the frontier and that they might not have to have the resources of one of the world's largest corporations to do it.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So the freakout really started in earnest with a Chinese AI company called DeepSeek. And DeepSeek had released a new AI model. You know, models are released all the time. Generally, they don't make international news. But this model was different in a few ways.
The Daily
China Challenges Silicon Valley for A.I. Dominance
But there was one other piece of this that I think really suggests that the AI race has entered a new phase, which is that DeepSeek did something that a lot of American companies have been hesitant to do, which is that they released their AI models as open source software, meaning that anyone on the internet can download and use, can make their own versions of, can adapt, can tweak.
The Daily
China Challenges Silicon Valley for A.I. Dominance
It is software that can be reused and remixed and improved upon. by anyone. And so when DeepSeek released its models this way, they really sent a message to the world that says, we are serious here about competing. And we're so serious that we're going to give away our models for free so that anyone who wants to can make them better.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And so all of a sudden, it just flipped the entire AI race onto its head and really sent it into a new gear.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So it's a complicated question to answer because there are ways in which it is probably good and ways in which it is probably bad. The case that this is a good thing is that in general, when you make things cheaper, they can be accessible to more people. I mean, remember, DeepSeek is not just free to use in the app or on the website.
The Daily
China Challenges Silicon Valley for A.I. Dominance
It was also released as open source software, meaning that anyone with an Internet connection can download it and install it on their own computers or maybe tweak it to serve their own purposes. So if you are a person who wants to use AI, maybe you have a small business or maybe you just want to use this to help you grow. write letters or emails. Maybe you're a student who wants to use this.
The Daily
China Challenges Silicon Valley for A.I. Dominance
You can now access a very powerful model for free. Maybe you are a developer or a startup who wants to build your own AI tools. Well, now you have this deep seek model that you can kind of take off the shelf as open source software and build your own version of it or run it on your own hardware.
The Daily
China Challenges Silicon Valley for A.I. Dominance
And so the people that I talk to in the tech industry who are at startups or smaller companies are very excited about this. This is a great development for them. And it also means that if you are a person who worries that all the AI power is going to go to a few huge companies, then the democratization of AI through open source models like DeepSeek probably makes you feel optimistic.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So that is the positive case for this. But there are also a lot of people who are really worried about what DeepSeek has done. I think the DeepSeek moment has really sparked a lot of new fears about how quickly this whole field of AI is progressing. I mean, just in the last few years,
The Daily
China Challenges Silicon Valley for A.I. Dominance
The leading AI models have gone from maybe being as smart as the average high school student to as smart as a college student to now being able to complete a lot of tasks that would have taken a PhD to complete. So these models are just getting much better very quickly. And a lot of folks in the AI community are just nervous about that. They say things like, well, maybe we're going to get...
The Daily
China Challenges Silicon Valley for A.I. Dominance
an AI that is as smart as the smartest humans in just a few years. And we don't really have a playbook for dealing with technology that is more intelligent than us. And so there are people who worry about these sort of runaway AI scenarios where you get super intelligent AIs that can sort of take control or maybe even harm humans.
The Daily
China Challenges Silicon Valley for A.I. Dominance
But even if you're not a believer in that kind of superhuman intelligence risk, There are just a lot of questions about whether we as a society are ready for advanced AI. Are we ready for the possibility that it could eliminate jobs? Are we ready for the possibility that it could really lead to a proliferation of misinformation or propaganda or even automated cyber attacks and things like that?
The Daily
China Challenges Silicon Valley for A.I. Dominance
One of them was that it just appeared to be a really good model, like better than the leading Chinese models at the time and on par or close to on par with the leading American models.
The Daily
China Challenges Silicon Valley for A.I. Dominance
So all of that is swirling around the conversation about DeepSeek because we have just accelerated the AI race again. And now it is not just American companies competing with each other over who is in the lead of that race. China has also stepped in. And there's a lot of fear and anxiety about what happens if we fall behind.
The Daily
China Challenges Silicon Valley for A.I. Dominance
Well, it may well be, because if you're a person who believes that TikTok is a national security threat, there's nothing about DeepSeek that is less of a threat, right? It is a Chinese company. It is subject to all the same laws and censorship guidelines as other Chinese software companies are.