Business Today - January 28, 2025
In a recent statement, NVIDIA has praised the Chinese AI model DeepSeek for its innovative approach and cost-efficiency, marking a significant milestone in AI development. DeepSeek's rise underscores the potential of Test Time Scaling, a technique that optimizes AI models during use.
NVIDIA CEO Jensen Huang commented on DeepSeek's success, highlighting its broader significance for the future of artificial intelligence. He noted that while DeepSeek's cost-efficient approach is making waves, it still relies heavily on NVIDIA GPUs and high-performance networking for inference—the process of running AI models to produce outputs after they’re trained.
DeepSeek has captured global attention by becoming the #1 free app on Apple’s App Store in the U.S., surpassing ChatGPT in downloads. Its AI assistant offers advanced capabilities at a fraction of the cost of competitors, thanks to its efficient use of resources.
NVIDIA acknowledged DeepSeek’s success and said how it showcases the potential of innovative AI techniques. “DeepSeek is an excellent AI advancement and a perfect example of Test Time Scaling,” NVIDIA said. “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 rise of DeepSeek has also impacted NVIDIA's market value, with the company seeing a significant drop in its stock price. Despite this, NVIDIA remains optimistic about the future of AI development and the role of cost efficiency in creating powerful AI models.
DeepSeek’s creators claim the model was trained using NVIDIA’s H800 chips, which are specifically designed to comply with US export controls. The cost of training was reportedly under $6 million, significantly lower than what major AI players like OpenAI typically spend.
This success is forcing the tech industry to rethink the role of cost efficiency in AI development and raising questions about the effectiveness of U.S. export restrictions.
What are your thoughts on this development?