DeepSeek released their first generation of large language models, DeepSeek-R1-Zero and DeepSeek-R1, on Jan. 25. The official DeepSeek website states that DeepSeek-R1 demonstrates remarkable generative capabilities similar to OpenAI-o1; the emergence of such novel technology has thus majorly impacted the U.S. tech market.
The OpenAI-o1 model performs well at intricate mathematical tasks, though it consumes a significant amount of physical materials, including time, money and valuable computer chips.
In comparison, DeepSeek’s AI models use a fraction of the chips. DeepSeek maintains a shocking price of $2.19 per 1 million tokens (tokens are units of text that itemize texts into digestible parts for large language models to generate text) for DeepSeek-R1; OpenAI’s price-per-million sits at nearly 30 times that price, costing $60 per 1 million tokens for OpenAI-o1.
Moreover, DeepSeek’s AI models are fully open-sourced, meaning that the entire code is free, duplicable and MIT-licensed, a license allowing users to use, modify and distribute software.
On Jan. 27, the Silicon Valley based tech conglomerate NVIDIA lost an estimated $500 billion in stock value. On the following Wednesday, they lost another $250 billion.
Dean Vu, 20, business major, said, “I lost about $1,000 in NVIDIA stock after the crash. If I had known earlier, I would’ve divested, obviously.”
The devaluation of NVIDIA follows a 2022 decision by former president Joe Biden’s administration, which limited semiconductor chip and chip-making equipment exports to China as a whole.
Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler explained the intentions of this blanket ban, stating that the People’s Republic of China has made immense emphasis on becoming a world leader in artificial intelligence by 2030. The executive decision was described by U.S. government officials as a way to maintain a global lead in AI development.
DeepSeek’s low price-of-development, in comparison to OpenAI’s multi-billion dollar training strategy, has caused skepticism with regards to the validity of bigger-budget chips with regards to LLM training, thus accumulating in a large-scale stock sell-off, from chip-makers and data centers across the globe.
President Donald Trump is considering further guardrails with regards to NVIDIA’s semiconductor chip sales to China following the introduction of DeepSeek on the open market.
“The release of DeepSeek … should be a wake-up call for our industries that we need to be laser focused on competing to win”, President Trump said in a press conference on Jan. 27.
“I have high hopes for the tech industry (despite) the newfound competition… I just worry about the job market,” Alex Ortiz, 22, business major, said.
As the east and west both pursue dominance in the field of AI, questions remain of the future of generative AI and the tech industry as a whole.
Winfred Wei, 18, computer science major, said he is hopeful that “DeepSeek and AI (won’t) completely replace human jobs, but just become another tool the way computers and machines were.”
“DeepSeek is good market competition for the AI monopoly that OpenAI had before,” Wei said.
