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AI Paradigm Shift? McElligott Weighs In On DeepSeek Shock
"I'm not gonna try to play semi- / AI- expert here," Nomura's Charlie McElligott said Monday, amid a
Hypescalers already rebounding. On the tech side of things, DeepShit is a piece of trash with a 5-30% error rate and crashes. Won’t even get into its CCP bias. Most believe the amount of GPUs are underreported that they use. The one innovative thing they did was tune up their GPUs and code to get around some limitations brought on by Biden administration exports controls.
Hyperscalers and users of GPUs should rally. Their major input cost is falling and their power bills should fall as well.
The hated Chinese also did the obvious = code to work with reduced and RELEVANT data sets. A chat bot at your local electric utility does not need a LLM parsing through every piece of data from every database ever created to answer a customer’s question about a monthly charge.
I can’t say that you are wrong. No one really knows how many high end gpus they got their hands on. If it really is as few as they say that is a pretty big deal. If it was really as inexpensive to train as they say that is also a big deal. Not everyone agrees with your assessment of the quality either. Making it open source was a nice move. And the cost – as one Twitter wag put it, when China steps into the ring, margins go to zero.
Anyone studying the space knew commoditization of some forms of AI like chatbots was coming. Nvidia is gonna play it like they’re excited this happened with legal exported chips so we may never know. Most experts think they used way more chips then claimed and that they were ones on the export control list. But to Heisenberg article, the most important thing here is flow$ and the pile in pile out effects
“Most experts”?
Some years ago I helped a former teaching colleague/serial entrepreneur sell a very nice, fast growing, Chinese tech software startup to a consulting SW company in Cambridge, MA for nine nice figures. The founding Chinese entrepreneur who brought my friend to Beijing to be his CEO, in fact, was a guru who got his engineering PHD in the US while he slept on a cot and my friend’s startup company in Dallas for he which created most of the critical SW. I have taught a few Chinese gurus and my former employer turns out a 100 or so a year. Between 50% and 82% of the full-time graduate students in key technical fields at US universities are international students. Who do you think co-founded Nvidia?
Thanks Dear Leader. You put a valuable perspective on this.
first time i did not comment, … what strikes me here with the magnitude of repricing since last night (sunday) without real facts or deep analysis … just inferences.
WOW … what happens if facts actually make it worse? To pile on Charlie’s fragility – facts not required, just inuendo and inferences. Those are pretty easy to create in todays social media cesspool … data not required.
Interested on implications for vol too.