News

Meet DeepSeek: ChatGPT’s newest nemesis

Whether you comb through your stocks with a fine-tooth brush or not, chances are you heard about the history-making tumble on the US stock market yesterday.

Nvidia broke the record for the largest one-day loss experienced by a company – a whopping $948 billion loss in value. 

That’s a 17 per cent drop in its share price. 

But, what prompted the mass sell-off?

Stay up-to-date on the latest news with The National Briefing – keeping you in the loop with news as it hits:

DeepSeek – a little-known Chinese competitor to ChatGPT – released a paper that sent investors into shock. 

The published piece revealed that its AI model was markedly better than other models, and at a fraction of the cost. 

This undermined long-held assumptions that the global leader in AI – the United States – and US-based companies like Nvidia and OpenAI, were maybe not worth their gold trophies. 

In Wednesday morning’s episode of The Briefing, Bension Siebert is joined by partner in AI consultancy firm Wisley, Mark Pesce to discuss what this could mean for the future of technology. 

Pesce asserts that premature accusations that China has beaten the US in its technology race isn’t entirely the case. However, it does reveal an underlying capability of the super power. 

“The Chinese have shown that even under American sanctions … that they can create AI systems that are equal or better.”

Although concerns have been raised regarding the consequences of AI, Pesce says DeepSeek’s open source could alleviate these fears.

“Everything they’ve released is open source … it essentially resets the commercial advantages of the private US firms,” he says. 

The paper has been widely considered as a breakthrough, providing clear directions on how to improve the efficiency of chips.

So, why exactly is DeepSeek shaking up the industry so much?

Pesce explains the main difference is the reasoning capabilities of the models. A reasoning program will consider all options and variabilities of a posed question in order to present the best answer. He likens it to the computer ‘thinking’ about the question, much like a human would. 

“OpenAI o1 was pretty much gold standard when it was released a few months ago. R1, which is built from DeepSeek-V3, was released last week and is basically as good as o1 is,” he said. 

Pesce doesn’t believe these developments will present any immediate changes in the way we consume AI and reap its benefits. However, scaffolding will eventually be established to work with these models in a way to properly harness these capabilities. 

As for whether the AI will be able to make you money?

Pesce says a skeptical eye is still needed across any processed plans.

Subscribe to The Briefing, Australia’s fastest-growing news podcast on Listnr today. The Briefing serves up the latest news headlines and a deep dive into a topic affecting you. All in under 20 minutes.

Kurt Hughes

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