"DeepSeek has commoditized the Large Language Model, publishing both the source code and the guide to building your own. Whether or not someone chooses to pay DeepSeek is largely irrelevant — someone else will take what it’s created and build their own, or people will start running their own DeepSeek instances renting GPUs from one of the various cloud computing firms.

While NVIDIA will find other ways to make money — Jensen Huang always does — it’s going to be a hard sell for any hyperscaler to justify spending billions more on GPUs to markets that now know that near-identical models can be built for a fraction of the cost with older hardware. Why do you need Blackwell? The narrative of “this is the only way to build powerful models” no longer holds water, and the only other selling point it has is “what if the Chinese do something?”

Well, the Chinese did something, and they’ve now proven that they can not only compete with American AI companies, but do so in such an effective way that they can effectively crash the market.

It still isn’t clear if these models are going to be profitable — as discussed, it’s unclear who funds DeepSeek and whether its current pricing is sustainable — but they are likely going to be a damn sight more profitable than anything OpenAI is flogging. After all, OpenAI loses money on every transaction — even its $200-a-month “ChatGPT Pro” subscription. And if OpenAI cuts its prices to compete with DeepSeek, its losses will only deepen."

https://www.wheresyoured.at/deep-impact/

#AI #GenerativeAI #DeepSeek #DeepSeekR1 #OpenAI #Nvidia #LLMs #BigTech #China