The Chinese AI startup DeepSeek shocked the U.S. tech industry this weekend when it unveiled a cutting-edge large language model that could compete with top players like OpenAI—and was built on a shoestring budget. The news delivered one of the biggest one-day wipeouts to U.S. tech stocks in recent memory. Several influential voices, however, warn the staggering claims put forth by the mysterious lab can’t be taken at face value.
So what exactly is DeepSeek, founded by the head of a Chinese quant trading fund, saying it has accomplished? For starters, the startup says it made its new R1 model in two months for under $6 million, or about 3% to 5% of what it reportedly cost OpenAI to create its next-generation o1 counterpart. DeepSeek also says it only had access to Nvidia H800 chips, a watered-down product designed to comply with U.S. export restrictions, as well as an older generation A100 offering—claiming in effect it has matched or bested the West’s best models with a hand tied behind its back. Several experts, however, say those claims are likely misleading or downright untrue.
