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To continue the drama around the stunning Chinese DeepSeek-r1 accomplishment, the ScaleAI CEO claims DeepSeek is being coy about their 50,000 H100 GPUs.
I realize now that DeepSeek is pretty much the perfect Chinese game theory move: let the US believe a small AI lab full of cunning Chinese matched OpenAI, with a tiny fraction of the compute budget, with no ability to get SOTA GPUs. Let the US believe the export regime works, but that it doesn't matter, because Chinese brilliance is superior, demoralizing efforts to strengthen it. Additionally, it would make the US skeptical of big investment in OpenAI capital infrastructure because there's no moat.
Is it true? I have no idea. I'm not really qualified to do the analysis on the DeepSeek results to confirm it's really the run of a small scrappy team on a shoestring budget end-to-end. Also what we don't see are the potentially 100-1000 other labs (or previous iterations) that have tried and failed.
The results we have now are that -r1 b14 and b32 are fairly capable on commodity hardware, and it seems one could potentially run the 671b model which is kinda maybe but not actually on par with o1 on a something that costs as much as a tinybox ($15k). That's a remarkable achievement, but at what total development cost? $5 million in compute + 100 Chinese worth of researchers would be stunningly impressive. But if the true cost is actually a few more OOMs, it would mean the script has not been completely flipped.
I maintain that a lot of OpenAI's current position is derivative of a period of time where they published their research. You even have Andrej Karpathy teaching you in a lecture series how to build GPT from scratch on YouTube, and he walks you through the series of papers that led to it. It's not a surprise that competitors can catch up quickly if they know what's possible and what the target is. Given that they're more like ClosedAI these days, would any novel breakthroughs be as easy to catch up on? They've certainly got room to explore them with a $500b commitment to play with.
Anyway, do you believe DeepSeek?
I think they found way to use their compute much more efficiently somehow, that's the key secret that they're not open-sourcing. Deepseek models are insanely cheap to run compared to Western models. If they're cheap to run, it follows that they're probably cheap to train.
Just look at openrouter: https://openrouter.ai/deepseek/deepseek-r1
Deepseek as a provider is by far the cheapest and fastest with modest but totally usable context length and output limits. The Americans serving this (with potentially superior GPUs) are completely shitting the bed, half their responses just stall in the chain of reasoning and don't get anywhere, despite them being 10x more expensive. They clearly have no idea how to run this model, which is reasonable since it's deepseek's baby. But Americans can all run American models just fine at the exact same price. Claude on google or amazon costs exactly the same. I think in addition to the advantage of knowing how to use their model they have some secret insight into how to use compute efficiently.
On the other hand, US export restrictions just don't work. Russian oil is still being sold, it just goes in circuitous routes through India to reach Europe. Russian imports of luxury vehicles from Europe still happen, it just goes through Azerbaijan or Kazakhstan.
China still buys H100s. They have money. Nvidia wants money. Middlemen want money. World markets go brrr. Deepseek is surely capable of rustling up a big cluster, or the Chinese state could give them access to one. Or they could borrow some via the cloud. Export controls work on big rare things monopolized by governments like H-bombs and fighter jets (and maybe semiconductor equipment which needs manufacturer support), not finished products that are produced en masse.
They do work as long as your definition of "work" isn't "100% effective".
Well, they haven't produced the desired result of 'Russia being unable to sustain its war effort', 'Russian elites overthrowing Putin due to not getting luxury imports' or 'China being unable to reach the frontier of AI research'. The Russian economy is performing quite well. Everything seems to be going up, real gdp, real incomes:
https://carnegieendowment.org/russia-eurasia/politika/2024/05/russia-war-income?lang=en
They're not totally ineffective. But most small, thin, unfit women aren't totally ineffective at fighting. They're just not significantly effective. They still lose vs big strong men.
Russian GDP is not doing so hot (I can't find a good multi year graph that goes up to nearly the present day, but this serves to show the recent trend). It's true that rumors of Russian collapse were obviously overblown but that doesn't mean they don't work at all.
5% growth over the past year is not hot? Any western country would consider it a miracle to have that growth rate. For reference america, which is the western country which best recovered from covid, has a growth rate of 2.5% over the past year. Honestly I was ready to accept your claim that the russian economy is doing bad until I saw the chart you linked. Now I'm wondering how they managed such impressive growth under such a restrictive sanctions regime.
It's not that hot when there's zero growth since 2013. It's easy to have a year with big growth if you crash beforehand.
I feel you're losing the plot here. We were talking about recent sanctions effect on the economy. Why are you bringing up the last decade when the discussion was about the last 2 years of economic growth?
Because sanctions have been in place since the invasion of crimea in 2014.
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