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Is DeepSeek a Deepfake?
The new China-based AI has shaken the U.S. markets, but is it really what it claims?
In 1957, the Soviet Union surprised and confounded the world by successfully launching the world’s first man-made satellite. This week, Communist China’s sudden introduction of its tech-leading AI, DeepSeek, is being called another “Sputnik moment.” But is it?
As defined by another AI search engine, Groq: “DeepSeek is an AI-powered search engine specifically designed for deep learning models and their associated metadata. It allows users to search, index, and retrieve deep learning models, datasets, and code repositories, making it easier to find and reuse existing models and accelerate the development of new ones.”
DeepSeek is comparable to OpenAI or Facebook AI, but with one major difference: it operates at a fraction of the cost. Founded in 2023 by Liang WenFeng in Hangzhou, China, DeepSeek’s R1 was released on January 20.
The claim that DeepSeek has been able to compete with top U.S. AI developers at a fraction of the cost and energy power has sent shockwaves across the tech industry, but even more so on Wall Street.
Has China developed a much more cost- and energy-efficient AI that will serve to drastically undercut the U.S. corner on higher-tech microchip design, which was assumed to be needed for the expansive development of AI? Is China about to surpass America’s AI technology advantage?
That concern set the market on a slide as the nation’s leading chipmaker, Nvidia, saw its market value plummet by nearly $600 billion.
As noted above, venture capitalist Marc Andreessen asserted, “Deepseek R1 is AI’s Sputnik moment.” Or, as cognitive scientist Gary Marcus put it, “Nobody has landed on the moon yet, or will they soon, but China has basically caught up to the U.S. in the flawed and faddish techniques of generative AI.” Donald Trump dubbed DeepSeek a “wake-up call,” noting the need for the U.S. to be “laser-focused on competing to win.”
However, all may not be as it seems with DeepSeek.
First, let’s just say that China doesn’t have a good reputation for honesty. Whenever China makes claims that seem too extraordinary to be true, the likelihood is that the truth has been, at best, stretched.
As Scale AI CEO Alexandr Wang offered, “My understanding is that DeepSeek has about 50,000 H-100s, which they can’t talk about, obviously, because it is against the export controls that the United States has put in place. … I think they have more chips than other people expect, but also [on a] going forward basis, they are going to be limited by the chip controls and the export controls that we have in place.”
Elon Musk echoed this with a succinct post on X: “Obviously.”
Seeming to further back up this suspicion that DeepSeek is using more AI chip computing power than it is letting on, The Wall Street Journal reported last July that the smuggling of advanced AI chips into China via Singapore was a booming business.
DeepSeek appears to be yet another example of China’s primary means of technological advancement: theft. While this is being presented as a genuine example of competition, it seems less like fair play and more like cheating. Time will tell.
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