The AI ecosystem after DeepSeek

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Financial Times 2d ago

The AI ecosystem after DeepSeek - Financial Times

Quick Summary:

If we acknowledge that DeepSeek may have reduced costs of achieving equivalent model performance by, say, 10x, we also note that current model cost trajectories are increasing by about that much every year anyway (the infamous “scaling laws . . .”) which can’t continue forever.

If demand for that technology is very price elastic (shouldn’t it be? ), that means the world will use way more of it than we thought it would before DeepSeek’s breakthrough.

We argued yesterday that if DeepSeek shows competitive AI models can be built at a much lower cost than believed, we need to revise our view of the likely economic structure of what the artificial intelligence industry will be.