But also one those of us actually working on foundational AI saw coming a mile away when most of the top research of late has been happening in Chinese labs, not American or European ones.
Can't wait to see what this boneheaded President's tarrif on TSMC does to this situation.
I don't understand the rage. This is good for everyone. Competition is what drives innovation and they even open sourced it! If you want to outdo them, learn from them. Don't just try to cry louder, it's embarrassing for everyone.
Can you please provide a source? Genuinely curious as this would be fatal to the US economy. Imagine working 2 years to get out from Covid chip shortages only to hammer progress down with tariffs.
Hopefully it's just posturing, but either way it's utterly asinine yet about par for the course what I would have expected from this administration.
NVIDIA's stock has been super bubbly—all DeepSeek did was set off itchy investor trigger fingers that were already worried about its highly inflated price.
DeepSeek uses H100s and H800s. They'll likely have reasons to buy more now, and America will want to compete even harder, buying more chips.
American companies are still way ahead as well, but they're just getting more competition. This will be healthy.
Tesla barely even sells but the stock just won't go down. Boeing orders have fallen massively and they're posting massive losses each quarter, and management shows zero desire to improve the situation. But the stock has basically stabilized since the initial catastrophes.
Some people like to complain that the stock market is very short termist, and valuations never reflect what happens in the long term. And here you complain that the stock market doesn't focus solely on short term pain, but is looking to some potential futures.
If you are afraid of the potentially unlimited downside to a short, you can buy an out of the money call option as an insurance. Or instead of shorting directly and insuring that, you can also buy a put option, which gives you the right to sell the stock at a specific price.
a) For inference, cheaper and faster compute will increase total inference spend, because the end-user products will work better and people will use them more.
b) For training, the big labs will continue to spend because we have yet to see diminishing returns to scale - in fact, we have in the past year unlocked a new dimension to scale up training-time compute - doing more RL after pre-training to improve reasoning capabilities. Since current SOTA models are not yet smart enough for all the tasks people want to use them for, this means that any efficiency gains will be used to further improve performance. In the current competitive environment, even with DeepSeek's work, it's near-impossible to imagine OpenAI, Anthropic, Google, or Meta deciding to cut the compute budget for training their next model by an order of magnitude. They will still incorporate DeepSeek's techniques into their next model, but use them to squeeze even more performance out of the compute they have, and will keep purchasing as much compute as NVidia will sell them. Expect this trend to continue until there are no more returns to scale anymore.
Any data center project currently under way or with plans to open within the next year or two has already place orders with NVidia or will do so very soon. Due to demand and lead times, you have to order to critical parts and systems today if you want to have half a chance of receiving them a year from now. Hardware supply lines are long and complex. I like to say that you cannot run a compiler and end-up with a warehouse full of chips.
The next fundamental reality has to do with competition.
Suppose company A foolishly decides to build a data center with only 10% of the chips they originally wanted based on the hype around DeepSeek. In the meantime, company B sticks to the plan and, perhaps, decide to take add the 90% of chips data center A did not take.
The net result will be the company A will be absolutely destroyed by company B. They will have nearly twice the compute capacity, which will translate to a huge competitive advantage across many fronts.
In other words, the selloff is, at best, ill informed. Market forces caused FUD. The smart one's took it as an absolutely massive buying opportunity. All you have to do now is wait.
Everyone just starts repeating the same things until people believe them as fact.
The "sell off" was basically nothing. Who cares that the NVDA went back to the price it was in October then bounced in the after market one day.
It is a complete non-story. Even at the bottom of the "sell off" it was still up 20% from the end of summer.
Listening to any news makes people less informed about the world in 2025. We are way past Gell-Mann amnesia. That was for the newspaper. "The news" in 2025 is really a strange kind of mass confusion engine. The more news a person consumes the more confused they are about the world.
The reality is that your average "civilian" stock investor, speaking in very generalized terms, is supremely ignorant.
I don't say this as a pejorative BTW. I am supremely ignorant of the inner workings of the pharmaceutical industry. Because of this, I do not invest in that sector. I have no way to understand any of it at a depth sufficient for me to make informed decisions. I'd be throwing darts at a board.
That is precisely the situation with lots of investors in the chips, electronics and software worlds. They don't know what they are doing. They have no clue whatsoever about the business cycles and realities of making these things, selling them, bringing them to market, competitive landscapes, implementation, etc.
And so, they are blind and reactive. If they stay in panic mode, we might very well see NVidia stock get down to $100. Frankly, I am actually rooting for that. I want all of these fools to get off the stock. And I want to load-up on it some more. They don't understand business (in general) enough to understand the relationship between DeepSeek and data centers, planned and future. They don't even stop to think about the reality that nobody in business who isn't a fool is going to use an AI service in China or developed by China. If they are hyperventilating about TikTok, I cannot even imagine what it would be like if all AI queries go to servers in China or are answered by models trained in China. I love China for all they have achieved, but it is no secret that they are not an open society at the level of most western societies.
I think we just have to wait until the sheep stop running before sanity will return to the field. They are getting hurt very badly. It's sad to watch.
If anything, r1 makes even more GPU demand likely, since it mitigated or at least delayed the risk AI hit a dead end (in which case, ceasing development may actually make sense).
Unless AI is a bubble, and it pops, I can't see the demand for compute going down.
Project Stargate is some large fraction of that, and of course Softbank is no stranger to losing money on overestimating demand (for example, WeWork). To be fair, China has a lot of overestimation of demand too (for example Evergrande). The other is that rapid competition leads to overinvestment by all parties.
https://www.wsj.com/tech/ai/sam-altman-seeks-trillions-of-do...
And money 5 years from now is simply worth less to markets than money 7 years from now.
https://youtubetranscriptoptimizer.com/blog/05_the_short_cas...
US is the prominent trade freedom proponent champion until it does not suits them
Also US is the prominent democracy proponent champion until it does not suits them
And also US is the free speech freedom champion until it does not suits them
It's all just dirty politics, in the end none of the people in power care if selling such technology feeds a monster or not, as long as they get their bags of money.
> voted for Hamas
It looks incredibly hypocritical to much of the world, and I can see why.
What an incredibly awful comment to make after so many kids have gotten blown to bits by Israel as some sort of justification.
Same sorts of stuff were said about Irish people during the Troubles btw.
Personally, I know I've lost a lot of street cred amongst certain work circles in recent history as far as my thoughts of 'shops should pursue local LLM solutions[0]' and the '$6000 4-8 tokens/second local LLM box' post making the rounds [1] hopefully gives orgs a better idea of what LLMs can do if we keep them from being 100% SAASlike in structure.
I think a big litmus test for some orgs in near future, is whether they keep 'buying ChatGPT' or instead find a good way to quickly customize or at least properly deploy such models.
[0] - I mean, for starters, a locally hosted LLM resolves a LOT of concerns around infosec....
[1] - Very thankful a colleague shared that with me...
"This is good for Nvidia" is the 2025 version of "this is good for bitcoin"
A lot of people want to poke at Chinese weakness wherever it’s exposed because Americans are used to being the best and also unconscious racism. When Japan was about to overtake the US the US pulled some similar moves and that is partly what’s responsible for japans current economic funk. It’s unlikely these moves will work on China.
Obviously i am disappointed regarding this, but people really blow this out of proportion imo. Rumor is this was a side project for some employees at a hedge fund. you think they specialize in security and software application best practices? i’m not exactly surprised that it’s insecure.
The really crazy thing is that anyone gives ANY company sensitive data to train on. regardless of which country the service is running in. That’s what’s actually crazy.
This whole thing should be an eye-opener to most people.
To ask an honest question, who gives a crap if a Chinese company manages to grab data that many of the usual Silicon Valley suspects have had all along and have been incrementally updating? How is this a "threat".
To pile on another gripe, why the hell does every single media outlet point out the "Tienanmen Square" question?
The whole thing has just become embarrassing. I honestly can't fathom what worse China could do with my personal info than the likes of say, Meta. I'm not saying I would enjoy it, but I just don't see how it could be more harmful than the Silicon Valley status quo.
Given how closely major US tech companies are now affiliated and partnered with the US Federal government, arguably the direct potential threat from them to US citizens may well be higher than from across a very big pond.
People trot out "I'd rather our guys spy on me than them" a lot, but that's putting a lot of faith in your local government. Conversely, who do you think has more to fear from their logged prompts on DeepSeek, US or Chinese citizens?
Given what we know about the PRISM program, it's a distinction without much difference.
Remind me of the list of US tech CEOs who were at (and paid for!) the inauguration?
While I agree with you overall ... have you heard of Mar a Largo?
It is a threat to WallStreet and Silicon Valley. It just broke the illusion that they're kings of tech.
> why the hell does every single media outlet point out the "Tienanmen Square" question?
Sour grapes, but also the media cannot report anything about China without showing its anti-China bias.
No it isn't (well it probably is too). This is the rather naff nation state bollocks in play.
You have either or both of "some bigger boys found a more efficient way of doing something I thought I was good at" and "I've wet myself".