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Chinese AI lab DeepSeek massively undercuts OpenAI on pricing — and that's spooking tech stocks
(www.businessinsider.com)
this post was submitted on 27 Jan 2025
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Overvalued - as in, less useful than it seems to be - probably, but the costs of running it are immense and they are certainly not that much lower in China (despite low energy prices due to nonexistent environmental standards), given the hardware embargoes they are under, forcing them to use less efficient hardware.
i believe one of the big advancements with deepseek r1 is their method of adding the reasoning component is novel and very very efficient. i haven’t checked it out, but it could legitimately just be more efficient to run
"due to non existent environmental standards" buddy unless your from rural northern Europe or the mountains in the Himalayan wtf are you talking about. Compared to America, china is much much less polluted per person with people personally accounting for less than the average American or westerner.
China has some of the worst polluted cities in the world, far worse than European or American cities. Water quality is abysmal, partly due to extremely inefficient use of fertilizer and pesticides. Products exported from China are commonly exceeding limits on toxic substances. It feels like every other week, there's another food safety scandal. Soil contamination is still worsening, in part due to extremely dirty mining practices. Chinese companies are falsifying records in order to hide excessive emissions from customers.
Meanwhile, environmental activists are routinely being persecuted by the state in order to silence them. That's totally what a country with a great environmental track record would do.
Did you just really send me iqair with such a bold statement without even checking the link itself? DUDE, JERUSALEM AMD SOFIA IN BULGARIA ARE MORE POLLUTED THAN SHANGHAI. For a nation of 1.4x thats seriously impressive. None of their cities crack top 5.
Wisdom is chasing you, but you are faster Barely any of your sources account for recent data, and focuses on the time during the most rapid transformation of a massive civilization in human history
And again, they still per person use significantly lesss co2 than an America, what about that?
Here's a challenge for you: Write something that is actually critical of the Chinese government. Can you do it?
Chinese freedom of opinions and knowledge is some of the worst on the planet and xi jinping is riding off the coattails of Deng Zhao pings success in opening up china. There, now here's another truth bomb, china sucks and treats it's citizens like robots but yet somehow I'd rather trust the historic super power which historically didn't bother nobody outside of it's little sphere unlike the current western superpowers who exploit the entire planet to make that "first world" experience for like 10% of humanity
Look, China isn't the devil or anything, they do lots of things better then the US. They want their "little sphere" to be Earth though. They have been making moves to compete with US influence all over the world for years now, and they're not doing it out of the goodness of their hearts.
Honestly, the more I look into China, the more I realize the worst thing about it is that they're very much like the US, no matter how much both sides would deny it. The US needs to be taken down a peg or two, but replacing it with a different empire isn't the way to go. We need a world without superpowers, not to try and find the "good" one. They'll always go bad once they get to the top. That's just how massive power structures work.
Uh, no... "Value", as in quality/performance for the price. You can literally overpay for anything in this world, just look at the luxury market.
I'm not claiming to know enough about AI or LLMs, but I don't think the first to market or the most prominent always set the price. So I think we'll have to see what the accepted price actually turns out to be...
Interesting about Chinese energy market is that in recent decades they’ve been investing heavily in solar power. Once they’ve figured out grid energy storage, running LLMs shouldn’t be a problem anymore.
Another option is to skip most of the grid storage and just spam solar panels. Rely on batteries only to get you through the night, not to bridge power across seasons. Build enough panels that your country can meet its needs even on a cloudy day in winter. Then you have reasonable power costs in the winter and nearly free electricity the rest of the year.
You could see a lot of energy-intensive industries becoming seasonal. We have a crop growing season, a school season, and sports seasons. Why not an "AI model training" season?
That would be possible, but seasonal production has some serious drawbacks.
Let's say you have a steel mill with several production lines, solar powered arc furnaces, and enough batteries to keep production running through the night. During the summer you can continue production 24/7, but in the winter you'll have to shut down completely, because there's not enough energy to keep even a single production line running. This means that there will be wild fluctuations in a variety of things:
This means, that in order to deal with the fluctuations, you would need to have lots of spare capacity in pretty much everything: More machines, more people, more money. If you could keep the production steady throughout the year, you could do so with less. Also, what will the employees do during the winter? The skiing resorts can't possibly employ all of them.
In the winter you'll have plenty of time to fix anything that's broken, but if there's an unscheduled shutdown during the summer, you're suddenly going to need lots of maintenance personnel and materials. Incidentally, those would be in short supply in the summer, because all the other factories would have the same problem. You would need to have lots of spare capacity in maintenance as well.
The AI industry should be fine, since you could train models when energy is cheap. Oh, but what if the summer isn't long enough for you to update all your models? Simply just buy more computers so you have more spare capa.... Oh, it's the steel mill problem all over again. Oh, but what about the people who use the models during the winter? Maybe you could charge your customers double the price during the winter so that the traffic would be reduced to a reasonable level. Fortunately though, wind power and other renewables could help with the winters, but having more grid energy storage would make things run smoother.
At to end of the day it comes down to this:
Is it cheaper to store steel stock in a warehouse or terrawatt-hours of electricity in a battery farm?
Is it cheaper to perform maintainance on 2 or 3x the number of smelters or is it cheaper to maintain millions of battery or pumped hydro facilities?
I'm sure production companies would love it if governments or electrical companies bore the costs of evening out fluctuations in production, just like I'm sure farmers would love it if money got teleported into their bank account for free and they never had to worry about growing seasons. But I'm not sure that's the best situation for society as a whole.
EDIT: I guess there's a third factor which is transmission. We could build transmission cables between the northern and southern hemispheres. So, is it cheaper to build and maintain enormous HVDC (or even superconducting) cables than it is to do either of the two things above? And how do governments feel about being made so dependent on each other?
We can do a combination of all three of course, picking and choosing the optimal strategy for each situation, but like I said above I tend to think that one of those strategies will be disproportionately favorable over the others.
Honestly, this all seems like small potatoes. We're trying to save our species from extinction here. We're trying to maintain the standard of living that came with the Industrial Revolution without burning out planet to a cinder.
If doing so means our steel industry runs 10% less efficiently, I really don't give a damn.
I don't know exactly how bad would it be, but my guess is that it would have a significant impact on the prices consumer pay for everything. In the past few hundred years, we've taken all sorts of nasty shortcuts that have allowed us to produce things at very low prices. If you want to do things the right way, it's going to cost much more.
Burning fossil fuels is just one of those unwise shortcuts that need to be reversed completely. In the long run, we're going to have to bury all the carbon we've dug up, and that's going to be incredibly expensive too.
Fortunately though, the downsides of intermittent energy production can still be mitigated with various grid energy storage technologies. The way I see it, investing into them is crucial.