China’s AI industry has shaken the generative chatbot market with the launch of DeepSeek, a model challenging the dominance of the U.S.-based platforms like OpenAI, Gemini, and ClaudeAI. In the midst of this buzz, an old video of OpenAI CEO Sam Altman has resurfaced, sparking discussion about the affordability of AI innovation.
OpenAI CEO Sam Altman’s Old Video Resurfaces
Built with an expenditure of just $5.6 million, DeepSeek’s development cost contrasts starkly with the hefty budgets allocated by American companies for similar technologies. Along these lines, in the 2023 video from an event in India, Altman was asked, “How is a small, smart team with a budget of $10 million able to create something impactful in AI?”
He responded, “It’s totally hopeless to compete with us on training foundation models.” This comment has drawn attention as DeepSeek disrupts the industry by achieving significant milestones with a much smaller budget.
DeepSeek’s popularity skyrocketed after becoming the top free app on Apple’s U.S. App Store. Meanwhile, Nvidia, a key player in the AI hardware market, faced an unprecedented single-day market valuation loss of nearly $600 billion.
The breakthrough for DeepSeek came last month with the publication of a paper detailing its DeepSeek-V3 model. The company revealed that training this model required less than $6 million in computational costs using Nvidia’s H800 chips, known for their lower performance compared to top-tier alternatives. This achievement underscored the efficiency of DeepSeek’s approach compared to traditional high-budget AI projects.
About DeepSeek’s Latest Launch
Building on this momentum, DeepSeek recently launched its R1 chatbot, which is reported to be 20 to 50 times more cost-effective than OpenAI’s o1 model, depending on task complexity. In a post on its official WeChat account, the company highlighted the affordability and accessibility of its latest offering.
Reacting to the innovation, Altman praised DeepSeek’s R1 model on X (formerly Twitter). “DeepSeek’s R1 is an impressive model, particularly around what they’re able to deliver for the price,” he wrote. However, he maintained OpenAI’s focus on heavy investments, stating, “We are excited to continue to execute on our research roadmap and believe more computing is more important now than ever before to succeed at our mission.”
DeepSeek’s rapid rise has sparked questions about the massive funding typically associated with developing generative AI. It suggests that innovation may not always require billions in investment.
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