Odd Lots The AI Model That Tanked the Stock Market
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Jan 28, 2025 
Zvi Mowshowitz, an AI expert and author of the Substack 'Don't Worry About the Vase,' dives into the market turmoil sparked by DeepSeek, a new AI model from China. He explains how DeepSeek caused a staggering loss for Nvidia and other tech giants in just one day. Discussion includes the implications of AI competition and market dynamics, the challenges for established players like Google and Meta, and the ethical considerations surrounding advanced AI. Zvi also touches on the future of AI technology and its financial impact.
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True Cost of DeepSeek
- DeepSeek's $5.5 million training cost for V3 doesn't reflect the full investment.
- Acquiring data, hiring engineers, and building infrastructure contribute significantly to the overall cost, amounting to hundreds of millions of dollars.
Open-Source Risk
- DeepSeek's open-source nature raises concerns about widespread access to advanced AI.
- Unrestricted availability of potentially smarter entities poses existential risks if misused.
Jevons Paradox and AI
- Increased AI efficiency won't decrease demand for compute, according to Zvi Mowshowitz.
- The demand for more capable AI and the rise of inference time compute will drive continuous demand for powerful GPUs.