The day after Christmas, a small Chinese company called DeepSeek unveiled a new artificial intelligence system that could match the capabilities of cutting-edge chatbots from companies like OpenAI and Google.
That alone would have been a milestone. But the team behind the system, called DeepSeek-V3, described an even bigger step. in a research work Explaining how they built the technology, DeepSeek engineers said they used only a fraction of the highly specialized computer chips that major ai companies relied on to train their systems.
These chips are at the center of a tense technological competition between the United States and China. As the U.S. government works to maintain the country's lead in the global ai race, it is trying to limit the number of powerful chips, such as those made by Silicon Valley company Nvidia, that can be sold to China and other rivals. .
But the performance of the DeepSeek model raises questions about the unintended consequences of the US government's trade restrictions. The controls have forced researchers in China to get creative with a wide range of tools that are freely available on the Internet.
The DeepSeek chatbot answered questions, solved logical problems and wrote its own computer programs as capable as anything already on the market, according to benchmark tests that American artificial intelligence companies have been using.
And it was built on the cheap, challenging the prevailing idea that only the biggest companies in the tech industry (all based in the United States) could afford to make the most advanced artificial intelligence systems. Chinese engineers said they only needed about $6 million in raw computing power to build their new system. That's about 10 times less than what tech giant Meta spent developing its latest ai technology.
“The number of companies that have $6 million to spend is vastly greater than the number of companies that have $100 million or $1 billion to spend,” said Chris V. Nicholson, an investor at the venture capital firm Page One. Ventures, which focuses on ai Technologies.
Since OpenAI unleashed the ai boom in 2022 with the launch of ChatGPT, many experts and investors had concluded that no company could compete with the market leaders without spending hundreds of millions of dollars on specialized chips.
The world's leading ai companies train their chatbots using supercomputers that use up to 16,000 chips, if not more. DeepSeek engineers, on the other hand, said they only needed about 2,000 specialized computer chips from Nvidia.
The limitations of the chips in China forced DeepSeek engineers to “train it more efficiently so it could still be competitive,” said Jeffrey Ding, an assistant professor at George Washington University who specializes in emerging technology and international relations.
Earlier this month, the Biden administration issued new rules that aim to prevent China from obtaining advanced ai chips through other countries. The rules build on multiple rounds of previous restrictions that prevent Chinese companies from buying or manufacturing cutting-edge computer chips. President Trump has not yet indicated whether he will approve the rules or rescind them.
The US government has tried to keep advanced chips out of the hands of Chinese companies out of fear they could be used for military purposes. In response, some companies in China have stockpiled thousands of chips, while others obtained them from a thriving underground smugglers' market.
DeepSeek is run by a quantitative stock trading company called High Flyer. By 2021, it had funneled its profits into acquiring thousands of Nvidia chips, which it used to train its previous models. The company, which did not respond to requests for comment, has become known in China for recruiting fresh talent from top universities with the promise of high salaries and the ability to pursue the research questions that pique their interest most.
Zihan Wang, a computer engineer who worked on an earlier model of DeepSeek, said the company also hires people without any computer science background to help understand the technology and be able to generate poetry and solve questions on the notoriously difficult college entrance exam. the chinese university
DeepSeek does not make any consumer products, so its engineers focus exclusively on research. That means its technology is not limited by the strictest aspect of Chinese ai regulations, which require consumer-facing technology to comply with government controls over information.
Major US companies continue to advance the latest advances in ai. In December, OpenAI introduced a new “reasoning” system called o3 that outperforms existing technologies, although it is not yet widely available outside the company. But DeepSeek continues to show that it is not far behind. This month, it released its own impressive reasoning model.
(The New York Times has sued OpenAI and its partner, Microsoft, accusing them of copyright infringement of news content related to artificial intelligence systems. OpenAI and Microsoft have denied those claims.)
A crucial part of this rapidly changing global market is an old idea: open source software. Like many other companies, DeepSeek has open-sourced its latest ai system, meaning it has shared the underlying code with other companies and researchers. This allows others to create and distribute their own products using the same technologies.
While employees at big Chinese tech companies are limited to collaborating with colleagues, “if you work on open source, you work with talent from all over the world,” said Yineng Zhang, a lead software engineer at Baseten in San Francisco who works on the SGLang open source. project. Help other people and companies create products using the DeepSeek system.
The open source ecosystem for ai gained momentum in 2023 when Meta freely shared an ai system called LLama. Many assumed that this community would thrive only if companies like Meta (tech giants with huge data centers full of specialized chips) continued to open source their technologies. But DeepSeek and others have shown that they too can expand the powers of open source technologies.”
Many executives and experts have argued that large American companies should not open source their technologies because they could be used to spread disinformation or cause other serious harm. Some US lawmakers have explored the possibility of preventing or limiting this practice.
But others argue that if regulators slow the progress of open source technology in the United States, China will gain a significant advantage. If the best open source technologies come from China, they argue, American developers will build their systems on those technologies. In the long term, that could put China at the center of ai research and development.
“The center of gravity of the open source community has been shifting to China,” said Ion Stoica, a computer science professor at the University of California, Berkeley. “This could be a great danger for the United States,” because it allows China to accelerate the development of new technologies.
Hours after his inauguration, President Trump rescinded an executive order from the Biden administration that threatened to curb open source technologies.
Dr. Stoica and his students recently built an ai system called Sky-T1 that rivals the performance of the latest OpenAI system, called OpenAI o1, in certain benchmark tests. They only needed $450 in computing power.
They did so based on two open source technologies released by Chinese tech giant Alibaba.
Their $450 system is not as powerful as OpenAI's technology or DeepSeek's new system. And the techniques they used are unlikely to produce systems that outperform leading technologies. But the project showed that even operations with minuscule resources can build competitive systems.
Toronto technology consultant Reuven Cohen has been using DeepSeek-V3 since late December. He says it's comparable to the latest systems from OpenAI, Google and San Francisco startup Anthropic, and much cheaper to use.
“For me, DeepSeek is a way to save money,” he said. “This is the kind of technology that someone like me wants to use.”
