Chinese startup DeepSeek's open-source AI model, R1, has caused both excitement and concern. While DeepSeek's R1 reportedly outperforms U.S. models and presents a significant advancement in AI, it has triggered a 17% drop in Nvidia's stock price. However, Nvidia CEO Jensen Huang has praised DeepSeek's work and sees it as an opportunity for increased demand for their GPUs.
Nvidia CEO Jensen Huang praised DeepSeek's R1 model as a 'perfect example of Test Time Scaling,' despite the Chinese startup's emergence causing Nvidia 's stock price to plunge 17% on Monday. DeepSeek, a Chinese startup, released R1 last week, an open-source reasoning model that reportedly outperforms the best models from U.S. companies like OpenAI.
R1's self-reported training cost was less than $6 million, significantly lower than the billions spent by Silicon Valley companies on their AI models. Nvidia's statement suggests that they view DeepSeek's breakthrough as creating more demand for their graphics processing units (GPUs). An Nvidia spokesperson told CNBC, 'DeepSeek is an excellent AI advancement and a perfect example of Test Time Scaling. DeepSeek's work illustrates how new models can be created using that technique, leveraging widely-available models and compute that is fully export control compliant.' The spokesperson added, 'Inference requires significant numbers of NVIDIA GPUs and high-performance networking. We now have three scaling laws: pre-training and post-training, which continue, and new test-time scaling.'Nvidia also clarified that the GPUs used by DeepSeek were fully export compliant, addressing concerns raised by Scale AI CEO Alexandr Wang who believed DeepSeek utilized Nvidia GPU models banned in mainland China. DeepSeek maintains that they used specialized versions of Nvidia's GPUs intended for the Chinese market. This development coincides with a growing emphasis on 'test-time scaling,' a concept proposed by OpenAI researchers in 2020. This theory suggests that by increasing the computational power and time allocated to a fully trained AI model during prediction or generation tasks, it can achieve superior reasoning capabilities and provide more accurate answers. Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman have been actively promoting this concept in recent months.
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