This podcast discusses the surprise release of DeepSeek's R1 AI reasoning model, a Chinese-developed open-source model comparable to OpenAI's. The panelists debate the accuracy of the claimed $6 million development cost, arguing that this figure only represents the final training run and ignores substantial prior investment in infrastructure. They also analyze the implications of DeepSeek's approach, highlighting its innovative algorithms and bypassing of NVIDIA's CUDA, suggesting that resource constraints may have driven unexpected breakthroughs. The discussion concludes by considering how this event shifts perceptions of China's AI capabilities and alters the investment landscape, potentially moving value creation upstream in the AI value chain. For example, the panelists estimate DeepSeek possesses a compute cluster exceeding $1 billion in value.
