AI Meets its Sputnik Moment: The Tech Stock Meltdown this week!

[godofwealth]

As most of you have probably already noticed, there is currently a massive meltdown in the AI tech stocks, obliterating more than a trillion dollars (that's a T, not a B) in share values. nVidia was hurt the most losing more than half a trillion dollars. The reason for this stock market debacle is a little known Chinese startup called DeepSeek. Almost unknown, it shot out of nowhere and showed that it could beat almost all the benchmarks for a standard set of tasks for evaluating AGI systems, at a small fraction of the cost used by Open AI and other tech AI giants here in the Bay Area. The costs were around $5M to train their model, which may seem like a lot, but its pocket change compared to the hundreds of billions of dollars being spent by the AI Tech giants. The stock market collapse was inevitable. I had warned colleagues at work that this type of scenario was inevitable, and I felt a bit like Cassandra today as tech stocks got routed.

So, what's the big deal here? Well, ever since chatGPT became as well-known an acronym for AI as Google was to Search, it became clear in the tech industry that all our worlds had changed forever. The future is large language models (LLMs), which will shortly run every part of your lives, yes, including the high end audio industry. Music streaming will change forever due to advances in generative AI and LLMs. But this current generation of "agentic AI" systems that are being developed are currently in their infancy, and there's a lot of trial and error in how to build "AI agents". It so happens that yours truly was one of a small handful of AI pioneers who researched this technology more than 35 years ago, and it is precisely the techniques we studied that have been used so successfully by DeepSeek to show the AI tech giants in the Bay Area their Sputnik moment. Now, the race to control the next-generation of AI software systems has gone international, and no one can count anyone out, because DeepSeek has greatly lowered the bar to entry. A few million $$ is within the reach of companies anywhere in the world, and it is no longer the case that the tech giants in the SF Bay Area are the AI Overlords. What a Sputnik moment! Trillions of dollars are now flowing out of the tech market, and the impact of the world's economy is truly stunning.

I cannot yet believe that ideas that I and a few others explored as a purely curiosity and fun filled intellectual journey is now moving the world's largest economy. Truly a momentous day for AI and the future of the world of computing. Some news stories to check out below, and a link to the original DeepSeek article. There's also an app for DeepSeek, which today shot up to the number 1 app on Apple's App Store.

The chatGPT AI King is dead. Long live the DeepSeek King (till it is overthrown yet again...)

What is DeepSeek? And How Is It Upending A.I.?

How did a little-known Chinese start-up cause the markets and U.S. tech giants to quake? Here’s what to know.

www.nytimes.com

DeepSeek: Is China's AI tool as good as it seems?

The artificial intelligence (AI) tool has shocked US markets after bursting onto the scene.

www.bbc.com

GitHub - deepseek-ai/DeepSeek-R1

Contribute to deepseek-ai/DeepSeek-R1 development by creating an account on GitHub.

github.com

 

[PYP]

“It has become very clear that other companies, not just someone like OpenAI, can build these kinds of systems,” said Tim Dettmers, a researcher at the Allen Institute for Artificial Intelligence in Seattle and a professor of computer science at Carnegie Mellon University who specializes in building efficient A.I. systems. “DeepSeek used methods that anyone can duplicate.”

It seems to me that by making it open source, they have undermined the proprietary approach that requires the various big players to obtain and make very large investments. The is inefficient. But when your big company is awash in money and extreme greed drives the funding mechanisms, throwing around a lot of money seems only natural and a way to say "We are in the (expensive/exclusive) game!"

"What exactly is open-source A.I.?​

Like many other companies, DeepSeek has “open sourced” its latest A.I. system, which means that it has shared the underlying computer code with other businesses and researchers. This allows others to build and distribute their own products using the same technologies.

This is part of the reason DeepSeek and others in China have been able to build competitive A.I. systems so quickly and inexpensively."

 

[andromedaaudio]

The stock market collapse was inevitable. I had warned colleagues at work that this type of scenario was inevitable, and I felt a bit like Cassandra today as tech stocks got routes.

Did you sell at the top then ?

The amount of stockmarket gurus that have come and gone/ failed is enourmous.

Buffets strategy seems to work best

Keep some cash at hand in case of the (inevitable?) crash.