Over the past few weeks, Chinese AI startup DeepSeek has been making significant waves in the tech community. It’s managed to outshine OpenAI’s o1 reasoning model in math, science, and coding, all while keeping costs remarkably low. To put it in perspective, DeepSeek only spent about $6 million developing their AI model, which runs on the R1 V3, using reinforcement learning. That’s just 3% of what OpenAI shelled out for its flagship model.
This remarkable breakthrough has catapulted DeepSeek to the forefront, taking the title of the most downloaded free AI app in America on Apple’s App Store, pushing ChatGPT out of the top spot. Yet, Helen Toner, a former OpenAI board member, suggests there’s even more room for DeepSeek to grow and potentially dominate. This, however, hinges on whether the strict AI chip export rules, set by Biden’s administration in 2023 that prevent advanced chips from being shipped to China, are lifted.
Toner is of the opinion that getting rid of these restrictions would be a major win for China and DeepSeek. Speaking to Fortune, she mentioned, “I think it’s possible that Nvidia will use this to persuade [President] Trump that the export controls are just holding back U.S. industry and that he should just revoke them.”
Toner’s insights into DeepSeek’s rise come amidst rumors that the company might have used Microsoft and OpenAI’s data without proper authorization, raising potential copyright issues. Meanwhile, both Microsoft and OpenAI have faced numerous copyright lawsuits. OpenAI’s CEO, Sam Altman, has defended the use of copyrighted material to train AI models, emphasizing that it’s challenging to create models like ChatGPT without utilizing certain restricted data.
As for the Trump administration’s stance on these export rules set in place by Biden? Toner remains unsure. “The big question is whether or not the Trump administration will pick up where the last administration left off.”
Reflecting on the situation, Toner said, “It doesn’t make any sense to try to walk it back. We’ve paid the price … putting China on high alert that chips are a strategic technology, and incentivizing the whole global supply chain to avoid using U.S. components so as not to be subject to extraterritorial controls.”
In his final week as President, Biden introduced even more stringent measures to tighten the export restrictions on China. These measures include preventing China from acquiring chips indirectly through companies like Huawei or manufacturing them via TSMC. As AI technology leaps forward, it’ll be intriguing to see how President Trump handles these restrictions. “But they could decide to step in and weaken it,” Toner added.
Even though much about DeepSeek’s R1 development process remains under wraps, it’s clear that they are positioning themselves to compete with top-tier AI models. This is especially relevant given OpenAI’s massive investment of $500 billion in the Stargate project, which aims to establish a network of data centers across the U.S. to boost their AI efforts.
“So far, DeepSeek is acting as a fast follower, not leading the pack,” commented Toner. “China is doing everything they can to keep up with the U.S. in AI, and they’re doing well at fast-following. But to imply they’re out ahead of us is clearly wrong.”
