A Chinese startup is sparking concern over US's AI dominance

The AI race has a new contender: the recently launched DeepSeek V3. The Chinese startup DeepSeek’s model is making waves in the AI scene with its open-source language model. DeepSeek V3 has shown impressive capabilities and has already beaten OpenAI's GPT-4o and Meta's Llama on various benchmarks. 

What sets the Chinese startup apart is that it could develop this model with a fraction of the computing power available to the world’s leading AI companies. Trained with a modest budget of $6 million using Nvidia H800 GPUs, DeepSeek V3 is designed for commercial use and adheres to Chinese regulations, though it carries noticeable political biases. 

DeepSeek V3 can code, translate, and write essays and emails starting from a descriptive prompt. The startup also recently unveiled DeepSeek-R1, a reasoning model with remarkable performance in specific tasks, further positioned as a cost-effective alternative for enterprises. Despite China's AI chip restrictions, the startup's advancements highlight significant progress in AI, inviting businesses to rethink their AI strategies amidst geopolitical considerations.

DeepSeek, a concern for the US? 

DeepSeek’s emergence didn’t go unnoticed, given its ability to create a powerful model with a small budget. According to AI researcher Andrej Karpathy, this level of capability typically demands clusters of around 16,000 GPUs, while the Chinese company declared to have used 2,000 of such chips.

Despite the export restrictions, DeepSeek shows China’s ability to create a serious contender in the AI race by leveraging open-source development. The New York Times underlined how this model's performance “raises questions about the unintended consequences of the American government’s trade restrictions.” Chinese researchers simply circumvented restrictions using available tools. 

Ion Stoica, a professor of computer science at the University of California, Berkeley, told the NYT how the progressive moving of the open-source community toward China could represent a huge risk for the US. This way, the Asian superpower can speed up the development of new technologies.

In his last days as president, Joe Biden issued new rules to prevent China from acquiring the most advanced AI chips from other countries. It is unclear whether newly elected President Donald Trump will maintain these rules. 

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The launch of Stargate

Earlier this week, The Stargate Project was launched. The venture aims to build $500 billion of AI infrastructure in the US and is a partnership between OpenAI, Oracle, Japan’s Softbank, and Emirati sovereign wealth fund MGX. 

The Stargate Project leaders said it has $100 billion in funding readily available, with the rest of the money coming in the following four years, creating around 100,000 jobs. The project wants to stimulate the re-industrialization of the United States while “providing strategic capability to protect the national security of America and its allies.”

Future implications

The emergence of DeepSeek as a formidable competitor in the AI landscape signals a shifting dynamic in global AI development. While the model demonstrates impressive technical capabilities, including self-checking outputs that enhance reliability in physics, science, and math, enterprises must carefully evaluate the geopolitical implications of adopting these technologies. The model's MIT license allows for unrestricted commercial use, but as industry experts suggest, organizations need to carefully assess both the technical benefits and potential risks associated with implementing Chinese AI technology in global operations.

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