The new AI that killed ChatGPT
How a small team managed to dethrone a tech giant
OpenAI is about to be dethroned from a new Chinese competitor by the name of DeepSeek AI and it is truly mind-blowing 🤯
Right now, training top AI models is INSANELY expensive. OpenAI, Anthropic, etc. spend $100M+ just on compute. They need massive data centers with thousands of $40K GPUs. It’s like needing a whole power plant to run a factory.
Then DeepSeek AI came in and reached ChatGPT-4 in less than $5 Million !!
That is an insane number compared to the end result performance, this has lead the crypto & stock market to crash this Monday, since now alot of big investors assume that the American market is too over valued.
DeepSeek AI managed to have a much more efficient approach in the processing department. hey rethought everything from the ground up.
Traditional AI is like writing every number with 32 decimal places. DeepSeek was like “what if we just used 8? It’s still accurate enough!” Boom — 75% less memory needed.
Also, for Traditional models? All 1.8 trillion parameters active ALL THE TIME. DeepSeek? 671B total but only 37B active at once. It’s like having a huge team but only calling in the experts you actually need for each task, making the processes more reasonable & faster while consuming much less resources.
The results are mind-blowing:
- Training cost: $100M → $5M
- GPUs needed: 100,000 → 2,000
- API costs: 95% cheaper
- Can run on gaming GPUs instead of data center hardware
The insane part, is that this is all open-source, the Chinese team did this as a side-project believe it or not, the code is public. The technical papers explain everything. It’s not magic, just incredibly clever engineering.
Why does this matter? Because it breaks the model of “only huge tech companies can play in AI.” You don’t need a billion-dollar data center anymore. A few good GPUs might do it.
For Nvidia, this is scary. Their entire business model is built on selling super expensive GPUs with 90% margins. If everyone can suddenly do AI with regular gaming GPUs… well, you see the problem.
Ofcourse, this is only the start but with such huge influence on the market in such a short period of time, the AI competition truly has begun and will not slow down anytime soon.
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Thanks for reading.
