Is it possible to build a spaceship for the price of a used car? That's the buzz around DeepSeek, a Chinese AI company boasting they trained a top-tier AI model for just $5.5 million. We talked recently about how amazing it was that they did this…but experts are raising eyebrows, suggesting the space-time continuum may not be quite what it appears. Let's dive into this mystery and see what’s up!
Here are Five Fast Facts about why DeepSeek's budget claims might be out of this world:
- 🏷️ Bargain Bin - Training advanced AI models typically requires massive investments in hardware, energy, and talent. DeepSeek claimed to do this for a teeny tiny $5.5 million using just 2,048 computer chips. This is the part that rocked the tech world and caused huge ripples in the market.
- 💻 To GPU Or Not To GPU - Now that other experts have had a chance to look deeper into DeepSeek’s claims, it seems that was more than a little bit of a stretch. In fact, they used around 50,000 top-of-the-line GPUs for their AI training, likely at a cost of around $1.6 billion. Not even inflation can account for that much of a difference!
- 🙈 Hidden Costs - Running thousands of GPUs isn't like charging your smartphone. The energy costs alone could power a small city, not to mention the operating and personnel costs on top of that, adding a hefty sum to the training bill. This is much more in line with what other companies have spent, meaning there’s no reason for Wall Street to panic anymore – disruption averted!
- 🇨🇳 All Red - One of the unique aspects of DeepSeek is that it’s Chinese, through and through. Its talent is exclusively from China, and it pays salaries well above other AI companies. All that control and loads of money being thrown around is making outsiders wonder if they’ve got something to hide. Or maybe they already got busted trying to hide it.
- 👎 Icing On The Cake - One other little tidbit that’s come out as analysts have dug into DeepSeek is that it actually isn’t all that great. In fact, it wasn’t trained on anything more recent than 2023, and it gave inaccurate or incomplete answers 83% of the time. Even weathermen chuckle at that one.
🔥Bottom line: While DeepSeek's AI achievements are in some ways impressive, their budget claims might be more fiction than fact. Building cutting-edge AI isn't a thrift store endeavor; it's a high-stakes investment. To paraphrase the old saying, if something sounds too good to be true, it probably involves a hidden billion-dollar price tag.
Do you think DeepSeek is legit, or a myth?
Let us know by connecting with us on Facebook and Instagram! Also, remember to share this newsletter with your friends & coworkers!
BTW, If you’ve read this far and haven’t yet signed up for the weekly Paycheckology newsletter, CLICK HERE!
