from The New York Times I'm Natalie kitro this is the [Music] daily last week financial markets went into a panic over an obscure Chinese Tech startup called Deep seek that company now threatens to upend the world of artificial intelligence and the race for who will dominate it today my colleague Kevin Roose a columnist and the co-host of the podcast hard Fork on how deep seek caught us all off [Music] [Applause] [Music] guard it's Monday February [Music] 3rd hi Kevin hello so great to be here so let's jump in Kevin how did this giant AI Tech freakout begin tell us that story so the freakout really started in Earnest with a Chinese AI company called Deep seek and deep seek 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 [Music] ways deep seek released it new chatbot app which is said to perform as well as chat GPT 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 a new AI King was crowned today well at least for now and so the Deep seek app un seeding open AI chat GPT goes to number one on the App Store charts it vaults ahead of chat GPT and these better known apps now the most stunning thing here isn't necessarily that China has developed a pretty good AI app it's how cheap it is 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 how cheap are we talking so we think that this model cost deep Seek 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 65 billion Microsoft says it plans to spend about $80 billion Microsoft said it was spending $80 billion and some of the world's most prominent technology leaders pledging to invest an initial $ 100 billion open AI had just announced this giant partnership where they were planning to spend to half a trillion over the next four years as much as half a trillion dollars to build the infrastructure for AI W yeah it's wild and on top of that deeps 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 a lot of people put a lot of money into Ai and now they're wondering if that money is needed the way that some of these American companies have said it is exactly 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 tech stocks plummeted Monday as investors raised concerns about advancements in Chinese artificial intelligence and so the stocks of many of the American tech companies start to fall right and so after all of this people in the American tech industry start asking questions like who is deep Sequel and how are they getting these incredible models with so little money spent on [Music] them okay we're going to get to those questions of who this company is and how they did this but I just first want to dig into the anatomy of the market Panic what are the real fears driving this 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 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 yikes what the heck why did I just spend all this money on this Lamborghini yeah and should I maybe be investing in balsa wood cars yes and then of course there's the geopolitical freak out because deep seek is a Chinese AI company and there has been this race happening uh between primarily the US 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 if one country's AI is way better than another country's AI they might have an advantage in fact the us 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 so instead deep seek 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 did they pull this thing off Kevin it certainly seems that at least based on what deep seek is saying it has managed to pull off a pretty impressive feat here but I'm wondering can we trust what the company says can we trust their claims about how they pulled this off yeah so there are a lot of people who are skeptical of what deep seek 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 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 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 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 okay so let's talk about those engineering techniques I mean how actually did deep seek do this make a chatbot on a shoestring budget potentially with second r chips so because deep seek 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 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 and it occurs to me Kevin that this company was operating under a lot of constraints and it sounds like that may have forced the engineers to think about how to tackle this problem differently as in it seems possible that not having these critical ingredients actually bred Innovation yeah I mean there's this saying in the tech industry that constraints Inspire creativity and that is definitely true here deep seek did not have access to the best American AI they did not have the largest budget or the most sophisticated uh 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 so Kevin how do the big American tech companies contend with that I mean what do they say to investors who are wondering about whether maybe these companies have been throwing money away when some of this work on these AI models could have been done much more cheaply 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 deep seek has now shown are possible these efficiency gains we could have them too think about how powerful our models would be if we put a billion dollars into the same kind of model that deep seek 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 and for you Kevin I mean obviously you've been covering this world for a very long time does that show you that more money doesn't necessarily mean more innovation in the world of AI where more money has been kind of a given you know as an assumption of what's needed I mean does it actually suggest that maybe smaller as you said scrappier startups could make huge gains in this world yeah I think it threw into question this fundamental assumption that only the big dogs could play in AI right you had to be Microsoft or Amazon or Google if you wanted a chance to build the state-of-the-art AI models and I think what the Deep seek story uh 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 h 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 deep seek 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 it is software that can be reused and remixed and improved upon by anyone and so when deep seek 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 and so all of a sudden it just flipped the entire AI race onto its head and really sent it into a new [Music] [Laughter] gear we'll be right back Kevin it sounds like deep seek has already or is about to really change the landscape of AI and my question is is that good like for people like you and me I mean maybe you more than me who use chatbots for consumers 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 deep seek is not just free to use in the app or on the website 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 you know help you write letters or emails maybe you're a student who wants to use this you can now access a very powerful model for free maybe you 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 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 deep seek probably makes you feel optimistic so that is the positive case for this but there are also a lot of people who are really worried about what deep seek has done I think the Deep seek 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 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 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 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 so all of that is swirling around the conversation about deep seek 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 Kevin if this really is that important of a moment in the global AI arms race how should we expect the United States to react I mean does the US government just ban this thing you know we saw Tik Tock baned because it was owned by a Chinese company is that the move here well it may well be because if you're a person who believes that Tik Tock is a national security threat there's nothing about deep seek 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 so for example if you ask deep seek to tell you what happened at tienan square or to say something mean about xiin ping 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 lot of ban Tik Tok why are we not also passing a law to ban deep seek so I think that's one potential outcome here but there's a key difference which is that Tik Tok is not open source software you cannot download Tik Tok and create your own version of it and so already the Deep seek models have been downloaded and recreated all over the world by lots and lots of different people and companies and so I think what the Deep seek story suggests is that it is going to be quite challenging to contain the spread of powerful AI without some big moves Kevin if we really are past that point you know of containment here if We're Off to the Races does it matter that this Innovation happened in China by a Chinese company I mean isn't this bigger than that at this point so there are people in the the American Tech scene who are calling this deep seek moment the sputnick 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 sort of profound fear and anxiety among Western Nations about whether they were behind their biggest political adversary when it came to technology a lot of people are looking at this moment with deep seek 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 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 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've seen over the past few years which is that the models keep getting better and they keep getting more efficient in a way it kind of follows the normal progression of any new product right like At first it's expensive and then more and more competition leads to Innovation the thing gets cheaper everything becomes more democratized 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 and I just think that world looks a lot different than the one we live in [Laughter] today Kevin thank you so much thanks for having [Music] me we'll be right back here's what else you need to know today on Saturday president Trump declared tariffs of 25% on all goods from Canada and Mexico with a partial carve out for Canadian energy and oil exports he also announced an additional 10% tariff on products coming in from China the tariffs are set to take effect at 1201 a. m.
