The new artificial intelligence arms race is called DeepSeek
DeepSeek: Changing the conversation between AI and social media: a keynote speech at the Goldstone collider on Wednesday, April 24
On today’s episode of Decoder, we’re talking about the only thing the AI industry — and pretty much the entire tech world — has been able to talk about for the last week: that is, of course, DeepSeek, and how the open-source AI model built by a Chinese startup has completely upended the conventional wisdom around chatbots, what they can do, and how much they should cost to develop.
The social media mogul made sure to praise the president. He said the US administration is proud of our leading companies, prioritised American technology winning, and will defend our values and interests abroad. Moments before the earnings call started, news broke that Meta is paying Trump $25 million to settle a lawsuit he brought against the company for banning his account after the January 6th insurrection. (The vast majority of the money is going to pay for Trump’s presidential library.)
The Meta is a cash-printing machine. The fourth quarter revenue was $48.39 billion, a 22 percent increase from a year ago, and the net profit was a staggering $20.8 billion, an increase of 43 percent. During the earnings call, CFO Susan Li said that Meta hasn’t “seen any noticeable impact” from its content policy changes on ad spending. 3.35 billion people used at least one of Meta’s apps daily in the fourth quarter — a 5-percent increase from the year-ago period.
DeepSeek, Stargate, and the Anomalies of Artificial Intelligence: How Recent Events and Future Perspectives are Coming to an End
DeepSeek, for those unaware, is a lot like ChatGPT — there’s a website and a mobile app, and you can type into a little text box and have it talk back to you. What makes it special is how it was built. Just weeks after the last model V3 began showing some very impressive artificial intelligence benchmark performance, the most recent major release of the startup, a reasoning model called R1, dropped. It quickly became clear that DeepSeek’s models perform at the same level, or in some cases even better, as competing ones from OpenAI, Meta, and Google. They are totally free to use.
The company claims the R1 cost less than $6 million to train and that the training cost was as high as $100 million. In a matter of days, DeepSeek went viral, becoming the No. 1 app in the US, and on Monday morning, it punched a hole in the stock market.
Tech stocks lost $1 trillion in value in a frenzied sell off earlier this week. Nvidia, in particular, suffered a record stock market decline of nearly $600 billion when it dropped 17 percent on Monday.
For more than two years now, tech executives have been telling us that the path to unlocking the full potential of AI was to throw GPUs at the problem. Since then, scale has been king. And scale was certainly top of mind less than two weeks ago, when Sam Altman went to the White House and announced a new $500 billion data center venture called Stargate that will supposedly supercharge OpenAI’s ability to train and deploy new models.
What is clear is that we’ve entered a new phase in the AI arms race, and DeepSeek and Stargate represent more than just two distinct paths toward superintelligence: they also represent a new, escalating front in the US-China relationship and the geopolitics of AI. The current situation is fraught, as President Donald Trump continues to wreak havoc on foreign relations with a new threat of tariffs.
The news cycle is very fast and there is a lot going on here. I thought I would let the senior reporter from the Verge talk with me about all the events of the past couple weeks and what the future holds for the industry.