Evan Lorenz: In January 2025, DeepSeek released its R1 model, which offered comparable performance to the best Western chatbots at a fraction of the price. As Western investors digested the news of cut-rate, Chinese competition, the Nasdaq sold off.
Grant's: Mr. Market is turning a blind eye so far to the recent unveiling of DeepSeek's latest model, V4. Like R1, V4 slightly underperforms the leading Western competition but sells at a fraction of the Western cost. Bloomberg explains how: "DeepSeek's trillion-parameter system uses the Mixture-of-Experts technique, selectively triggering only a small subset of experts and activating only up to 37 billion parameters per task to keep inference costs far lower than for similar frontier models."
DeepSeek has put its model up for sale at 75% off until the end of the month, but once that discount ends, V4 will cost between just one-tenth to one-quarter of the leading American equivalents.
Lorenz: Price competition is what just might deflate the high-cost and capital-intensive AI boom.
~ Evan Lorenz, "The way the boom ends," Grant's Interest Rate Observer, May 8, 2026
No comments:
Post a Comment