DeepSeek flips the script

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The Chinese startup's efficiency gains could undermine compute demands from the biggest names in tech

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(Image credit: Future)

There are decades where nothing happens; and there are weeks where decades happen, so the saying goes, and that is certainly true of the final week of January 2025.

In the weeks leading up to recording this episode, we had planned to talk about Stargate – OpenAI, Oracle, and Softbank’s half-a-trillion pound AI investment. We will, but in a very different context because unless you’ve been under a rock, you’ll know that today’s episode has to be all about DeepSeek.

To say the Chinese large language model has caused an upset in the market would be an understatement. Within days of its release, it wiped more than a trillion dollars off the US stock market, and sent big tech into a public spiral.

But where did DeepSeek come from? And what does it mean for the future of the AI sector?

In this episode Jane and Rory are once again joined by Ross Kelly, ITPro's news and analysis editor, to explore the profound implications of DeepSeek.

Highlights

“I don't want to say loser here, because, you know, there's signs that there's rallying going on in the markets. But Nvidia dropped around 17 points, losing almost $600 billion in market value. Broadcom as well, equally, down around 17 points.”

“You need to remember what happened after the Sputnik situation, though it was again, a game of one upmanship between the USSR and and the United States and the West. Think we will potentially see that between, you know, us and Chinese based companies in years to come.”

“In making the claim that using relatively underpowered chips, specifically chips that China can can still import not even the frontline flagship chips that Nvidia is using today, in making the claim that using just those DeepSeek has been able to make a model that rivals some of OpenAI's best models, it scared a lot of investors because it throws into question that whole approach.”

Footnotes

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Rory Bathgate
Rory Bathgate
Features and Multimedia Editor

Rory Bathgate is Features and Multimedia Editor at ITPro, overseeing all in-depth content and case studies. He can also be found co-hosting the ITPro Podcast with Jane McCallion, swapping a keyboard for a microphone to discuss the latest learnings with thought leaders from across the tech sector.

In his free time, Rory enjoys photography, video editing, and good science fiction. After graduating from the University of Kent with a BA in English and American Literature, Rory undertook an MA in Eighteenth-Century Studies at King’s College London. He joined ITPro in 2022 as a graduate, following four years in student journalism. You can contact Rory at rory.bathgate@futurenet.com or on LinkedIn.