DeepSeek, a "Chinese" AI similar to ChatGPT (OpenAI), has caused speculative markets (especially American) to collapse in recent days. This AI is essentially open source (you can download it locally on your PC) and is (almost) entirely free compared to ChatGPT. It was created by a Chinese hedge fund not connected to AI producers that also self-financed. In addition to the fact that it is free, as mentioned here the "code is open" unlike ChatGPT. The idea is not revolutionary (there are no big differences with ChatGPT) but it tries to obtain the same results using fewer resources. Main functions:

-Web search
-DeepThink (reasoning, business ideas, creativity, content advice, work, etc.)
-Translations (formal and informal)
-Presentations (slide architecture)
-Text extraction via image upload (however, you cannot yet upload PDF or upload images to have them analyzed)

WHY DID THE US MARKETS COLLAPSE?
This Chinese fund would have built DeepSeek without being specialized in AI and not spending tens of billions but "only" 5 million (about 1% of what US companies spent) to "train" it (Machine Learning). Furthermore, it would seem that it was built using much fewer NVIDIA resources (CPU, GPU and specific AI hardware). The markets have reacted negatively, assuming that all these funds that are invested in AI are not necessary, if it is true that the Chinese have managed to build a super performing AI with much less budget and using fewer resources. It should be noted, however, that DeepSeek was made easier precisely because "someone" had already paved the way. Would they have been able to do it, starting from 0, without exploiting the intuitions of others?

Another thing to consider is that this hedge fund, years ago, had bought 10,000 NVIDIA H100 (used to train AI) for a total infrastructure of several hundred million dollars. The Americans had banned NVIDIA from selling cards of this power to China and therefore put less powerful H800 accelerators on the market so as not to violate those directives. The Chinese still had their NVIDIA H800 (spending well over 5 million). DeepSeek also caused the crypto market to dump by saying that all technological sectors are overpriced.

In the meantime, another Chinese giant (Alibaba) launched Qwen 2.5 which was even superior to DeepSeek itself. Qwen 2.5 would surpass DeepSeek-V3, GPT-4o and Llama-3.1-405B, according to the manufacturers themselves. Ultimately, the seemingly low development and operating costs of these Chinese startups have pushed investors to question the huge spending plans of major AI companies in the United States, driving down the price of the AI ​​stock sector (which was in a bit of a bubble anyway).

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