Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads that shape SpaceX, Tesla X, The
Boring Company, and Neurolink. I'm your host, Will Walden.
So how did a Chinese AI company suddenly cause so many ripples
in the tech world? And why didn't NVIDIA, the
leading AI chip maker, lose $600 billion in market value in one
day? And is deep seeks low cost, high
performing AI model a sign of an emerging global AI race, or
something a little less threatening?
So on Monday, the NASDAQ fell 3.1%, sending shock waves across
the stock market. And NVIDIA bore the brunt of the
losses, with its stock price plummeting 17% and wiping out
$600 billion in its market value.
The cause of this dramatic drop? Something called Deepseek, a
relatively unknown Chinese AI firm, unveiled a cutting edge AI
model that deliver comparable performance to industry leaders,
yet require significantly less compute power and cost far less
to train. Now the implications of this
announcement spread very quickly.
For some, Deep Seeks achievement reaffirmed concerns about
Silicon Valley's costly AI development practices.
Others, particularly national security advocates, saw as a
wake up call in the race for artificial intelligence
dominance, particularly between the United States and China.
And for those worried about AI safety, DEEP Seeks Open Access
model represents a step toward uncontrolled proliferation of an
advanced AI systems. Yet as transformative as Deep
Seeks rise might appear, its actual significance remains a
topic of debate. While some see it as a moment of
reckoning for Western AI labs, others question whether it truly
changes the competitive dynamics of this industry.
And one of the biggest concerns about Deep Seek is the
uncertainty surrounding its long term goals.
The company is a spin off of High Flyer, a decade old Chinese
quantitative hedge fund Co founded by Deep Seeks CEO.
Originally developed for trading algorithms, Deep Seek eventually
shifted to building large languid models and committed to
open sourcing its tech. Its stated mission is ambitious
yet pretty vague to unravel the mystery of AGI with curiosity.
And for now, Deep Seeks business model seems almost altruistic
and offers its EI tools to developers at minimal cost
without clear profit driven incentives.
But that could change at any moment.
The company could pivot to monetization by introducing
subscription fees or restricting its EPI access.
Some theorize the Deep seat could also funnel user data into
high Flyers hedge fund operations to extract financial
insights. Now another layer of uncertainty
comes from the Chinese government, which might step in
to regulate how Deep Seek distributes its AI.
This prospect of a Chinese company providing advanced AI
tools to developers worldwide, including in nations considered
adversarial to China, is unlikely to go unnoticed by
Beijing. Adding to the concern is how
Deep Seeks managed to build its breakthrough models.
It didn't invent a fundamentally new AI architecture, though.
Instead, it optimized existing techniques pioneered by American
firms like Open AI and Google. Using older hardware and
streamlined processes, Deep Seek achieve performance levels
comparable to some of the best AI systems available today at a
much lower cost. Now this approach shows the
vulnerability for USAI labs. The technological leads are
becoming increasingly short lived.
In early years, it might have taken months or years for
competitors to replicate innovations like Open AI, GBT
models and deep seeks. Rapid optimization shows that
the time lag between cutting edge development and global
adaptation shrinking is anthropic Co founder Jack Clark
succinctly put it deep seek means AI proliferation is
guaranteed now. Deep seeks rise also exacerbates
the perception of AI development as a geopolitical race.
Some venture capitalists and tech advocates have long framed
AI progress as a competitive moment between the United States
and China. Their argument rests on fears,
then, an authoritarian regime armed with advanced AI could
outpace democratic nations and use AI technologies for
strategic or military dominance. And critics warned that this
narrative serves self-interest goals.
By casting AI as an arms race, proponents can argue against
regulation that might slow innovation or reduce returns on
investments in AI startups. Additionally, it channels more
funding into military technology products, which often benefit
the same venture capitalists advocating for this framing.
Yet there's a genuine danger in accelerating AI development
under the banner of competition. When safety concerns are
sidelined, the risk of releasing powerful, unaligned AI systems
grows. While US labs like Open AI and
Anthropic have attempted to build safety measures into their
AI models, these efforts remain incomplete.
Deep Seek, on the other hand, appears to have no public facing
strategy for ensuring its AI systems are safe or aligned with
human values. And if you have any human values
of your own, you take a look at the subscribe button or the
follow button on whatever podcast platform you're
listening on right now. Because I've noticed that only
10% of you, around 10% of you are actually subscribed to the
show. So if you could do me a favor
and hit the subscribe button, I would love that.
Now the people really think the best thing that humanity can do
is create things smarter than ourselves, though, and then
we'll see what happens after that.
The lack of a clear plan for managing superhuman AI
intelligence only heightens concerns that framing AI as a
race will lead to reckless outcomes.
But despite these concerns, there are reasons to believe
that Deep Seeks emergence doesn't fundamentally alter the
AI industry's trajectory, at least not yet.
For one, much of what Deep Seek has achieved was already
anticipated. Open source models have been
reverse engineering breakthroughs from major labs
for years, and the cost of training AI models has been
declining steadily. The cost of producing GPT 4
level intelligence has dropped by a factor of 1000 in just 18
months. The further price drops, while
disruptive, were expected and won't necessarily destabilize
major players right now. Additionally, U.S. companies
continue to invest heavily in building infrastructure for more
powerful AI systems. And while Deep seeks cost
effective approach may be ideal for current AI tech, major firms
like Open AI and Google remain focused on training increasingly
advanced models that require state-of-the-art hardware.
These investments in AI infrastructure are aimed at
pushing the boundaries of what AI can do, not just optimizing
existing technologies. Another factor working in favor
of US labs is the Biden administration's export controls
and advanced ships to China. Although Deepseek has
demonstrated its ability to innovate with less powerful
hardware, restrictions are still relatively new and may limit
China's ability to scale its AI efforts over the long term.
The lack of access to cutting edge chips could make it harder
for Chinese companies to deploy their models as widely as US
firms can. And while Deepseek has made
headlines for its optimization, American companies still lead in
conceptual breakthroughs. Much of their industry's current
focus has shifted toward developing AI agents capable of
more autonomous and complex, complex human like tasks.
And Open A is new offering, such as tools that can operate
independently to perform tasks, hint at where the next wave of
competition will unfold. Deep Seek has yet to demonstrate
similar ambitions, and there's little evidence that it can help
peace US firms in this area. But the sudden rise of Deep Seek
is kind of concerning for people.
Its success has revealed vulnerabilities in the business
models of major AI labs in the United States, and it's raised
questions about how AI technologies should be shared or
regulated internationally. However, it's still challenging
for all parties involved. The AI industry is shaping the
way that we do business in the way that we live, in the way
that we communicate. Now there's declining costs of
open source technologies. I'm a huge proponent of open
source. I built my whole web development
career on open source. I built one of the most popular
frameworks for for a software to launch me into my career on open
source technology, on Bootstrap. So I understand that open source
is a huge, huge win for AI. Do you want the huge tech
companies building everything and controlling everything?
Or do you think this is free speech?
I want to know in the comments, do you think code is speech?
Because if I build something and I keep it to myself and that I
sell it to you. Capitalism, right?
But if I build it and I give it away and I let other people
build on top of it, not only does that ensure that that
software continues to grow and become better, but it can
transform into something completely different.
And the language of that model could change as well.
So if you believe that open source is a bad thing, please
leave it in the comments below. And if you think it's a good
thing, also tell me why. And if you want open AI to win,
if you want Google to win, you know, that's capitalism at work
right there. But for now, the emergence of
low cost, high performance Chinese AI models is as much a
moment for reflection as it is a cause for concern.
Should we be concerned about this model?
This time? We don't have any evidence that
we should be. So use the open source model.
Check it out. Grab its GitHub repo, test it
out, tinker with it. If you're a software developer,
it's a great way to check it out and get inside that code.
Dig in. I'm a software developer at
heart. I build websites for businesses,
Will walden.com, WILWAL, don.com.
I'm an engineer and I have been for about 20 years.
So I'm very versed in this sector, and I believe that the
safety that can come with open models like this is paramount
collaboration, a huge, huge deal for open source software.
And the innovation that could come from this could change the
landscape and take the power away from those that are in
charge right now, like Sam Altman at Open AI and Google
and, you know, XAI, things like that could take some of that
power away. And I think we need some of that
power in our hands as a community, as an open source
community. Think of WordPress.
Most of the web is powered by WordPress.
I don't know the exact stats, but it's somewhere it's over 50%
is powered by WordPress. WordPress is an open source
technology that anybody can change and fork can make into
anything they want to make it into according to their terms.
So something like that for AI that could power so many LLMS,
could power so many different chat bots, can power so many
different companies for free and open, I think that's a winner
for everybody. Hey, thank you so much for
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