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China's DeepSeek AI rattles Wall Street, but questions remain

Technology - Tue, 01/28/2025 - 02:42
Chinese researchers backed by a Hangzhou-based hedge fund recently released a new version of a large language model (LLM) called DeepSeek-R1 that rivals the capabilities of the most advanced U.S.-built products but reportedly does so with fewer computing resources and at much lower cost. High Flyer, the hedge fund that backs DeepSeek, said that the model nearly matches the performance of LLMs built by U.S. firms like OpenAI, Google and Meta, but does so using only about 2,000 older generation computer chips manufactured by U.S.-based industry leader Nvidia while costing only about $6 million worth of computing power to train. By comparison, Meta’s AI system, Llama, uses about 16,000 chips, and reportedly costs Meta vastly more money to train. Open-source model The apparent advance in Chinese AI capabilities comes after years of efforts by the U.S. government to restrict China’s access to advanced semiconductors and the equipment used to manufacture them. Over the past two years, under President Joe Biden, the U.S. put multiple export control measures in place with the specific aim of throttling China’s progress on AI development. DeepSeek appears to have innovated its way to some of its success, developing new and more efficient algorithms that allow the chips in the system to communicate with each other more effectively, thereby improving performance. At least some of what DeepSeek R1’s developers did to improve its performance is visible to observers outside the company, because the model is open source, meaning that the algorithms it uses to answer queries are public. Market reaction The news about DeepSeek’s capabilities sparked a broad sell-off of technology stocks on U.S. markets on Monday, as investors began to question whether U.S. companies’ well-publicized plans to invest hundreds of billions of dollars in AI data centers and other infrastructure would preserve their dominance in the field. When the markets closed on Monday, the tech-heavy Nasdaq index was down by 3.1%, and Nvidia’s share price had plummeted by nearly 17%. However, not all AI experts believe the markets’ reaction to the release of DeepSeek R1 is justified, or that the claims about the model’s development should be taken at face value. Mel Morris, CEO of U.K.-based Corpora.ai, an AI research engine, told VOA that while DeepSeek is an impressive piece of technology, he believes the market reaction has been excessive and that more information is needed to accurately judge the impact DeepSeek will have on the AI market. “There's always an overreaction to things, and there is today, so let's just step back and analyze what we're seeing here,” Morris said. “Firstly, we have no real understanding of exactly what the cost was or the time scale involved in building this product. We just don't know. … They claim that it's significantly cheaper and more efficient, but we have no proof of that.” Morris said that while DeepSeek’s performance may be comparable to that of OpenAI products, “I've not seen anything yet that convinces me that they've actually cracked the quantum step in the cost of operating these sorts of models.” Doubts about origins Lennart Heim, a data scientist with the RAND Corporation, told VOA that while it is plain that DeepSeek R1 benefits from innovative algorithms that boost its performance, he agreed that the general public actually knows relatively little about how the underlying technology was developed. Heim said that it is unclear whether the $6 million training cost cited by High Flyer actually covers the whole of the company’s expenditures — including personnel, training data costs and other factors — or is just an estimate of what a final training “run” would have cost in terms of raw computing power. If the latter, Heim said, the figure is comparable to the costs incurred by better U.S. models. He also questioned the assertion that DeepSeek was developed with only 2,000 chips. In a blog post written over the weekend, he noted that the company is believed to have existing operations with tens of thousands of Nvidia chips that could have been used to do the work necessary to develop a model that is capable of running on just 2,000. “This extensive compute access was likely crucial for developing their efficiency techniques through trial and error and for serving their models to customers,” he wrote. He also pointed out that the company’s decision to release version R1 of its LLM last week — on the heels of the inauguration of a new U.S. president — appeared political in nature. He said that it was “clearly intended to rattle the public’s confidence in the United States’ AI leadership during a pivotal moment in U.S. policy.” Dean W. Ball, a research fellow at George Mason University’s Mercatus Center, was also cautious about declaring that DeepSeek R1 has somehow upended the AI landscape. “I think Silicon Valley and Wall Street are overreacting to some extent,” he told VOA. “But at the end of the day, R1 means that the competition between the U.S. and China is likely to remain fierce, and that we need to take it seriously.” Export control debate The apparent success of DeepSeek has been used as evidence by some experts to suggest that the export controls put in place under the Biden administration may not have had the intended effects. “At a minimum, this suggests that U.S. approaches to AI and export controls may not be as effective as proponents claim,” Paul Triolo, a partner with DGA-Albright Stonebridge Group, told VOA. “The availability of very good but not cutting-edge GPUs — for example, that a company like DeepSeek can optimize for specific training and inference workloads — suggests that the focus of export controls on the most advanced hardware and models may be misplaced,” Triolo said. “That said, it remains unclear how DeepSeek will be able to keep pace with global leaders such as OpenAI, Google, Anthropic, Mistral, Meta and others that will continue to have access to the best hardware systems.” Other experts, however, argued that export controls have simply not been in place long enough to show results. Sam Bresnick, a research fellow at Georgetown’s University’s Center for Security and Emerging Technology told VOA that it would be “very premature” to call the measures a failure. “The CEO of DeepSeek has gone on record saying the biggest constraint they face is access to high-level compute resources,” Bresnick said. “If [DeepSeek] had as much compute at their fingertips as Google, Microsoft, OpenAI, etc, there would be a significant boost in their performance. So … I don't think that DeepSeek is the smoking gun that some people are claiming it is [to show that export controls] do not work.” Bresnick noted that the toughest export controls were imposed in only 2023, meaning that their effects may just be starting to be felt. He said that the real test of their effectiveness will be whether U.S. firms are able to continue to outpace China in coming years.

Trump announces four new executive orders, including to build ‘Iron Dome’

Around The Globe - Tue, 01/28/2025 - 02:30
Announced in Florida, Trump's latest orders also target military diversity programmes and transgender service members.

Children joined riots for the 'thrill', report says

Education - Tue, 01/28/2025 - 02:10
The children's commissioner says children often made impulsive decisions to become involved in the riots.

Switzerland releases, deports Palestinian American journalist Ali Abunimah

Around The Globe - Tue, 01/28/2025 - 01:16
The Electronic Intifada's executive director says his offence was 'being a journalist who speaks up for Palestine'.

VOA Mandarin: What is Stargate? Is China catching up in AI?

Technology - Tue, 01/28/2025 - 01:12
The multibillion-dollar Stargate Project announced by U.S. President Donald Trump will focus on building data centers with the goal of turning the U.S. into a computing power empire, according to experts. Some believe the significant boost in U.S. computational capabilities will widen the gap with China in artificial intelligence. “And this is an industrial buildout that, at least right now, China really is not in a position to do because of the [semiconductor] export controls that the United States is placing,” said Dean W. Ball, a research fellow at George Mason University’s Mercatus Center. However, there are signs that China is catching up with U.S. companies in key AI metrics by relying on open-source software. Click here for the full report in Mandarin.

Trump fires US federal prosecutors involved in probes of his behaviour

Around The Globe - Tue, 01/28/2025 - 01:09
The move breaks with federal norms against punishing civil servants for actions taken under a different administration.

Claudia Sheinbaum acknowledges non-citizens deported from US to Mexico

Around The Globe - Mon, 01/27/2025 - 23:46
The Mexican president announced more than 4,000 people were sent to her country during Trump's first week in office.

UN chief expresses ‘concern’ over Trump’s freeze on US foreign aid

Around The Globe - Mon, 01/27/2025 - 21:30
Experts say Trump administration's order to halt foreign assistance will 'cost many, many lives'.

US arrests nearly 1,000 people in undocumented migrant crackdown

Around The Globe - Mon, 01/27/2025 - 21:13
US immigration officials arrested nearly 1,000 people in a single day as a part of a sweeping nationwide operation.

Auschwitz survivors commemorate 80th anniversary of the camp’s liberation

Around The Globe - Mon, 01/27/2025 - 20:38
Auschwitz survivors and world leaders commemorated the 80th anniversary of the camp’s liberation in Poland.

Israel says 8 of 33 on Hamas list of captives to be freed are already dead

Around The Globe - Mon, 01/27/2025 - 19:41
Israel says next release of captives will take place on Thursday, followed by another on Saturday.

‘Branded’: Satellite images show Star of David carved into Gaza

Around The Globe - Mon, 01/27/2025 - 19:32
The symbol, apparently created by Israeli tanks, can be seen from space in the Palestinian enclave.

China’s DeepSeek causes rout among AI-linked stocks

Around The Globe - Mon, 01/27/2025 - 19:17
Shock to financial markets came from Chinese firm whose AI app it says was made at a fraction of US AI models.

Israeli air strike kills two Hamas fighters in the occupied West Bank

Around The Globe - Mon, 01/27/2025 - 19:15
The attack in Tulkarem comes as Israeli raids on the nearby Jenin area of the occupied West Bank enter a seventh day.

Large crowds of displaced Palestinians head to northern Gaza

Around The Globe - Mon, 01/27/2025 - 19:05
Thousands of displaced Palestinians walked along the main roads leading to northern Gaza.

The day millennials’ hip-hop went to the Klan’s ball

Around The Globe - Mon, 01/27/2025 - 19:00
Amid all the celebrations of Trump returning to US power, turncoat rappers kissing his ring have left the rawest wound.

Israel forces kill two in south Lebanon as displaced people try to return

Around The Globe - Mon, 01/27/2025 - 18:26
Seventeen people also wounded a day after Israeli forces killed 24 people in south Lebanon following delayed withdrawal.

Is the deportation dispute between Colombia and the US really over?

Around The Globe - Mon, 01/27/2025 - 18:21
Furious row defused after US President Donald Trump's threat of sanctions over migration.

France says EU will lift some sanctions on Syria after al-Assad’s fall

Around The Globe - Mon, 01/27/2025 - 17:01
European countries say they are eager to help reconstruct war-ravaged country and build bridges with its new leaders.

M23 rebels claim capture of key DR Congo city of Goma

Around The Globe - Mon, 01/27/2025 - 16:53
The M23 armed rebel group said it has captured the Democratic Republic of the Congo’s eastern city of Goma on Monday.

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