DeepSeek-V3, launched in December 2024, only added to DeepSeek’s notoriety.
According to DeepSeek’s internal benchmark testing, DeepSeek V3 outperforms both downloadable, openly available models like Meta’s Llama and “closed” models that can only be accessed through an API, like OpenAI’s GPT-4o.
Equally impressive is DeepSeek’s R1 “reasoning” model. Released in January, DeepSeek claims R1 performs as well as OpenAI’s o1 model on key benchmarks.
Being a reasoning model, R1 effectively fact-checks itself, which helps it to avoid some of the pitfalls that normally trip up models. Reasoning models take a little longer — usually seconds to minutes longer — to arrive at solutions compared to a typical non-reasoning model. The upside is that they tend to be more reliable in domains such as physics, science, and math.
There is a downside to R1, DeepSeek V3, and DeepSeek’s other models, however. Being Chinese-developed AI, they’re subject to benchmarking by China’s internet regulator to ensure that its responses “embody core socialist values.” In DeepSeek’s chatbot app, for example, R1 won’t answer questions about Tiananmen Square or Taiwan’s autonomy.
If DeepSeek has a business model, it’s not clear what that model is, exactly. The company prices its products and services well below market value — and gives others away for free. It’s also not taking investor money, despite a ton of VC interest.
The way DeepSeek tells it, efficiency breakthroughs have enabled it to maintain extreme cost competitiveness. Some experts dispute the figures the company has supplied, however.
Whatever the case may be, developers have taken to DeepSeek’s models, which aren’t open source as the phrase is commonly understood but are available under permissive licenses that allow for commercial use. According to Clem Delangue, the CEO of Hugging Face, one of the platforms hosting DeepSeek’s models, developers on Hugging Face have created over 500 “derivative” models of R1 that have racked up 2.5 million downloads combined.
DeepSeek’s success against larger and more established rivals has been described as “upending AI” and “over-hyped.” The company’s success was at least in part responsible for causing Nvidia’s stock price to drop by 18% in January, and for eliciting a public response from OpenAI CEO Sam Altman. In March, U.S. Commerce department bureaus told staffers that DeepSeek will be banned on their government devices, according to Reuters.
Microsoft announced that DeepSeek is available on its Azure AI Foundry service, Microsoft’s platform that brings together AI services for enterprises under a single banner. When asked about DeepSeek’s impact on Meta’s AI spending during its first-quarter earnings call, CEO Mark Zuckerberg said spending on AI infrastructure will continue to be a “strategic advantage” for Meta. In March, OpenAI called DeepSeek “state-subsidized” and “state-controlled,” and recommends that the U.S. government consider banning models from DeepSeek.
During Nvidia’s fourth-quarter earnings call, CEO Jensen Huang emphasized DeepSeek’s “excellent innovation,” saying that it and other “reasoning” models are great for Nvidia because they need so much more compute.
At the same time, some companies are banning DeepSeek, and so are entire countries and governments, including South Korea. New York state also banned DeepSeek from being used on government devices.
As for what DeepSeek’s future might hold, it’s not clear. Improved models are a given. But the U.S. government appears to be growing wary of what it perceives as harmful foreign influence. In March, The Wall Street Journal reported that the U.S. will likely ban DeepSeek on government devices.
This story was originally published January 28, 2025, and will be updated regularly.
Source: Original Article
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