DeepSeek, a Chinese AI firm, has launched its open-source R1 model, which rivals the capabilities of leading AI models like ChatGPT, OpenAI's o1, Meta's and Google's, at a significantly lower cost. This has sent shockwaves through the tech world, raising questions about the future of AI development and spending. While DeepSeek's chatbot demonstrates impressive performance in tasks like reasoning and logic, it lacks some advanced features found in ChatGPT. Concerns also remain regarding data privacy and censorship limitations due to DeepSeek's operations in China.
A Chinese AI firm, DeepSeek, is making waves in the tech world with its recently released R1 model. This open-source AI appears to rival, or even surpass, the capabilities of models developed by OpenAI, Meta , and Google , all at a significantly lower cost. The model's release sent shockwaves through Silicon Valley, causing a drop in tech stocks, particularly Nvidia, which saw a 18% decline on Monday.
Business Insider put DeepSeek's chatbot, which incorporates both the R1 and V3 models, to the test to compare its performance against ChatGPT in the ongoing AI arms race. At first glance, DeepSeek's interface closely resembles ChatGPT's, featuring a minimalist design dominated by a text box. The model effectively handled basic chatbot tasks such as creating a personalized vacation itinerary and generating a meal plan based on a provided shopping list, without displaying any noticeable hallucinations. Similar to OpenAI's o1 model, when confronted with complex questions, DeepSeek attempts to 'think' through the problem, revealing its reasoning process in real-time through an internal monologue. This virtual thought process often results in unintentionally humorous moments, with the chatbot criticizing itself, experiencing existential self-doubt, before ultimately arriving at an answer. DeepSeek's R1 model seems adept at tackling reasoning and logic problems that have previously challenged other AI models. While the DeepSeek V3 model struggled with counting the number of 'R's in the word 'strawberry,' R1 provided the correct answer within seconds and efficiently solved a logic problem developed by AI research nonprofit LAION that caused difficulties for many rival models last year.However, DeepSeek's web search functionality proved less impressive, failing to provide accurate answers to straightforward questions like 'who is the current US president,' instead responding with a message about experiencing high traffic. Compared to ChatGPT, which I've been using since its November 2022 launch, DeepSeek lacks some of the advanced features added over the past two years. Features like voice mode, image generation, and Canvas, which allows for on-the-fly editing of ChatGPT's responses, significantly enhance the chatbot's usability beyond its novelty value.Despite these shortcomings, DeepSeek's key advantage, and the reason behind the turmoil in global financial markets, lies in the significantly lower cost of its R1 model. Bernstein tech analysts estimated that R1's cost per token was 96% lower than OpenAI's o1 reasoning model. This suggests that DeepSeek's impressive results on a limited budget could challenge the entire tech industry's AI spending frenzy.However, it's important to acknowledge certain caveats. First, DeepSeek operates under strict censorship guidelines in China regarding sensitive topics. Asking the model about Taiwan's status results in attempts to redirect the conversation towards 'math, coding, or logic problems,' or assertions that Taiwan has been an 'integral part of China' since ancient times. Furthermore, DeepSeek's terms of service indicate that user data may be stored on 'secure servers located in the People's Republic of China.' This raises concerns, given the heightened scrutiny surrounding the transfer of personal data from the US to China, with lawmakers accusing TikTok of failing to adequately protect US user data. A review of DeepSeek's settings reveals no current options for controlling the data shared with its Chinese servers. Despite these challenges and unanswered questions, DeepSeek's AI chatbot remains a remarkable achievement. Currently, it performs comparably to ChatGPT, at a fraction of the cost, and for most users who prioritize functionality over advanced features, this could be a compelling proposition
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