Loading summary
Transcript1 lines
- [00:00]
A
Today on the podcast, we're going to go deep on Deep Seek. I know, not a great pun, but this is something that obviously everyone has been talking about lately and it has wiped off hundreds of billions of dollars off the US stock market with a grand conspiracy from hedge funds. Nvidia has collapsed their stock price. So much has happened, I think it was the single biggest stock price wipeout of any individual stock stock that happened to Nvidia with all this. So we're going to get into all of it, what people are saying and why. I think that a lot of this is quite overblown and some areas that I think are actual, actual big breakthroughs from all this. So let's get into it. Say Deep Seek is a Chat GPT competitor that is coming out of. I wanted to give just a 2 second overview of what it's capable of. So it's got an LLM model like ChatGpt. Fantastic. They just released their reasoning model, which is like the 01 in ChatGPT, which is like the best model. And when it came out, they put it up against all of the other AI models in the AI model arena. And it did quite well. In fact. It was like out of 100, it was like point behind 01. So pretty much on par exactly with 01 as far as the quality of the outputs. So this thing's really good. How did they get it this good? First, I wanted to just quickly say I played around Deep Seek and you probably heard a bunch of people say this. It's good at a lot of things. It's got Internet search capabilities, which is fantastic. And it's obviously censored by the Chinese government. So those are kind of the two big things. And just quickly, to illustrate that point, I asked it who killed jfk? It goes through all of its reasoning, which is great at searching the web, is looking at Wikipedia, a bunch of other places and it says, you know, the assassination of President John F. Kennedy remains one of the most scrutinized events in modern history. And then it's like the official conclusion was that Lee Harvey Oswald was the lone assassin. Goes through all the reasons why. Then it says the controversies and conspiracies and it goes through, you know, some of the controversies in regards to the CIA and the FBI and how Oswald took a trip to Mexico City where he visited the Soviet and Cuban embassies. He left a threatening note at the FBI headquarters, but they destroyed it. The CIA never reported to the FBI that he went, whatever. All of the conspiracy stuff that's crazy about this whole story to put it on there. And I think that's fantastic. Great. Fine. This is kind of like one of those controversial American moments. They put it on there. Now, if you ask it about a controversial Chinese moment, what's really interesting to me about this is that it will give you the response and it'll go through the whole process of thinking. So it's censorship. Happens after the fact. It doesn't read my question and censor it at the question, it censors it at the actual response. When I say how many people died in China under Mao. It went through all of its reasoning, all of its research, and it even. The interesting thing is because it shows you the search results that it found. So I can click on those search results and see mass killings under communist regime. On Wikipedia, I can look at the great Chinese famine. I can. Death and oppression under Mao. There's all of these different, like Wikipedia list. Yeah, all the stuff. All of the. All of the data and search results still there. And you can actually click on them. So that's interesting. That's not been censored. And then it actually wrote its full response to me, which was like, between 40 and 80 million people died. It was very controversial. This was during the People's Revolution. So he wrote this whole thing out and I read it and then immediately after it finished typing it out, it instantly disappeared and got replaced by a Sorry, that's beyond my current scope. Let's talk about something else. This is the same thing. If you ask about Tiananmen Square, if you ask about Xi Jinping, if you ask about the CCP bean, and anything negative about it. If you ask it about. I asked it earlier today, like, who Tankman was from China, and it gave me the whole response and then it disappeared and said, sorry, that's beyond my current scope. So evidently Deep Seek is Chinese and censors anything that is not Chinese. But it just does it in such a obvious way. It's kind of mind blowing that they would allow. I don't know, it's just weird to me being. It's just weird. So anyways, it's. It seems like it's way too on the nose and confusing. Why. How people could trust. Like, what all. It's. It's not even a conspiracy. Like, what other ideologies are they, you know, suppressing? Like, we always complain with Chat GPT being like politically biased and stuff, and then like putting stuff in there and then there and then Chat GPT is like, no, that's just the training data and that's just what it said and whatever. There's like all those arguments. That's the argument we're having here. We're, we're straight up having this. Sorry, that's beyond my current scope. Let's talk about something else. Like it's, it's clearly censored. Okay, so, so that's the big controversy with Deep Seek. Now let's talk about what has happened from Deep Seq. So Deep Seat came onto the scene. Really phenomenal model. Like this thing's powerful. It's just as good as ChatGPT for the responses. It's way cheaper because they let it be open source so people can host it locally on their device. Which though it's censored by China, locally hosted on your device. The good thing about that is that none of the data that you put in there is sent to China when you go to Deep Seq website, website like I'm on right now and I ask this question and I'm logged in with my profile. It's now making a profile of me sending it to some data center in China. It's like I'm probably getting added in China of people that have asked five questions that are quote, unquote beyond their scope. Right? So I'm probably added to some Chinese list. I probably can't visit the country anytime soon. You run it locally on your own computer, you're totally good. And yeah, that's totally fine. So that's the cool thing about the model. Other than using it, you know where it's accessing them. So this all was created by a hedge fund in China that does quantitative trading. And what's interesting about this is they, when they released it, they said we spent $5.5 million to train this whole model. And you know, we're spending billions of dollars with these top American companies, hundreds of millions of dollars to do the training runs for OpenAI, Anthropic and a bunch of these other players. So it's like, how does it cost us $100 million or three or $400 million and it only costs you $5 million. This essentially tanked the price of Nvidia. If you look at the price of Nvidia, it went from trading at around $142 a share, crashed all the way down to $117 a share. It was a 18 or 19% drawback collapse in the price, which wiped out like 4 or I think it was like 2 to $400 billion in market cap, crashed a bunch of other stocks like AMD as well. That also saw some pretty steep dives. Now the interesting thing with all of this, AMD also saw, yeah, some big crashes as well. The interesting thing with all of this is if you look at Nvidia today after that big, you know, crash and, and the reason why it crashed was like, well, Nvidia sells chips to train AI models. But all of these big AI companies have so many chips now, if they can all cut their costs by 30x by following deepseek because Deep Seat published their papers on how they did it, like then they're not going to need to buy any more chips and Nvidia is going to crash. No one's going to buy chips anymore and it's going to crash. Okay, that was yesterday's news with like a 1718 drop. Today we're back up 8% and I am proud to say did buy the dip yesterday. Not financial advice. I bought it at about $121. We're about $128. So I didn't get the absolute bottom, but got it before it gave a rally. I mean, my prediction here is that this is all overblown and I'll give you all of the reasons why, but again, not financial advice, just that's what I did. Just FYI, you know, full transparency. So the interesting thing here recently we had a US tech mogul, Palmer Luckey, inventor of Oculus and Anduril, said Deep Seek is legitimately impressive, but the level of hysteria is an indictment of so many is an indicament of so many. The $5 million number is bogus. It's pushed by a Chinese hedge fund to slow investment in American AI startups, service their own shorts against American titans like India and hide sanction evasions. America is a fertile bed for psyops like this because our media apparatus, our technology companies and wants to see President Trump fail. We have so many useful idiots uncritically reporting Chinese propaganda because on some level they want it to be true. They love seeing hundreds of billions of dollars wiped off of the market cap of our largest companies. Okay, this is Palmer Lucky. Now a couple things to break out here. First of all, I've seen a lot of analysis on this five million dollar number and virtually everyone says it is impossible to train with $5 million. They break down exactly how many chips this hedge fund allegedly had that trained this because apparently it's just a side project that's hedge funded. So it's like, oh yeah, we just have a random hedge fund. It's just as random side project for $5 million that's crushing your, all your billion dollar companies. So that's kind of what scared the stock market as this is becoming increasingly less credible. That's why we're seeing an 8% rally on Nvidia today. And people are pretty much not believing it. Like Palmer same. So they're looking at how many chips they have and they're saying even with that amount of chips, that would have been, you know, like $100 million or. Yeah, much, much more than $5 million. So the reason why they're reporting the $5 million number, number one, this hedge fund legitimately did take out short positions on Nvidia and others verified. So they took up short positions, announced this crazy 5 million dollar number, watched Nvidia crash and I'm hoping, or assuming cashed in because I don't think that it's, you know, it'll stay crash forever. So they, I'm assuming they try to cash in on a 17 crash that they caused from this, which is still a ma. Like if that was all the hedge fund did, if this was a side project to crash Nvidia 17 and like that was the only goal of this, that was still, you know, obviously like a major incredible heist because they had to train an entire AI model to get as good as ChatGPT. So I don't think that's the only thing they did is probably just like, oh, this will fund, you know, more chips. We'll just short them, fund more chips. What's actually happening with the chips, in addition to that, that he mentioned here, as far as hiding, sanctions and sanction evasion is what a lot of people have been bringing up, which is the fact that Deep Seek has apparent or that, sorry, Nvidia apparently is selling about 25% of all of their revenue is selling chips to Singapore. Now Singapore, of course, is right next to China. Singapore does not have any, doesn't have any sort of stipulations. China, we're banning the most advanced chips from being shipped to China because we want to maintain an AI, you know, edge. But there's no problem with, you know, Singapore. So really what's happening is shipping the chips to Singapore companies who are reselling them to Chinese companies. So that's why, you know, 25% of Nvidia's revenue goes to Singapore. That's not happening. It's actually 25% going to China and companies like, you know, the hedge fund that owns Deep Seq are going and buying those. So this is essentially what's, what's happening with Deep Seek. That is interesting. They're essentially just trying to hide the sanctions and short the company and make a lot of money in the meantime. Now, in the meantime, every single news organization, every single influencer, everyone is talking about Deep Seek and how it's going to crash the American. I've had so many random people text me asking about this. What's interesting to me about all of this is just the fact that it's become so that now tons of people are using it became the number one app on the app store deepsea. And. And like, definitely, if it's cheaper, you can make a. But what was really funny that happened was that Deep Seq itself yesterday got so overwhelmed by new user signups on their app that they actually stopped any Americans or anyone from anywhere other than a Chinese phone number from signing up for the Deep Seek app. Which is pretty funny because obviously they are, you know, they need to use chips to run this AI model and they don't have enough bandwidth to run the AI models. They had to block it from people. So what would the solution be? Well, the solution would be for them to buy more chips from Nvidia. So I don't think this is a very good, you know, narrative. Nvidia's crashing and dying when literally one of the, you know, this huge breakout. A company doesn't even have enough chips to run their stuff. They're gonna have to pay Nvidia more money. So I think Nvidia is gonna keep making a ton of money. I think some really cool things that, that Palmer Luckey said was Deep Seq is legitimately impressive. This is true. It is legitimately impressive. They are doing some legitimate things where they, they saved a ton of compute. They really optimized a lot of things with trains their model with how they use a bunch of these mini micro models, how they reverse engineered OpenAI's reasoning capabilities and built it in. And it's really cool how it shows you the reasoning capabilities. You see it. Whereas with OpenAI they hide it so you can't see it. So Deep Seq is doing a lot of really impressive things. They're open not, it's not actually like open source, but they do allow people to take the model and run it themselves. It's not open source because we don't have all the, we don't have all the model weights and we don't have all of the data that goes along with that. And it's not. So it's not technically open source, but they are allowing you to take the model to run the model, giving you certain weights and information about it. So that is, you know, it seems generous. You have companies like Meta that everyone's like, oh my gosh, Meta was supposed to do this with Llama. They didn't do it. OpenAI was supposed to be an open source company and they didn't do it. And now we're relying on this Chinese company to do it. So I will give them some credit for a lot of that that they've done and the fact that they've come up with the papers that they've written on some really impressive things they've optimized. Now the thing about it is whenever everyone's saying like Deep Seq is going to be the end of American AI and you know, it's so over. We even had like Trump give a press conference yesterday and David Sacks, the head of AI and crypto in America, has been tweeting about Deep Seek all day long. And in my opinion, this is actually an incredible moment that's going to catalyze. It's going to be a catalyst for America and American economy. Up until this point, we've had essentially to be more competitive. So that's my belief. And the reason is because up until this point in the United States, we've had a bunch of big players, right? We had anthropic, we have OpenAI, we have Meta, we have Google. All of these companies are working towards developing really impressive LLM models. Now we've had this competition, but I don't think we've been as the fastest and best we can because we focus on a lot of things in America that are American culture. How, I mean, yeah, I'm sure some people will disagree with me on this, but my opinion, the how, you know, how biased is it? And we can't let it say this or we can't let it be offensive to these groups. We can't let it do this. And we have, you know, like Google being a quote, accused of being a woke AI and generating historically inaccurate photos of, you know, black people that were Nazi soldiers, like ridiculousness, just ridiculousness has been a focus. It's not just purely on making these models the best they possibly can be. And so because of some of this distraction and some of the over, you know, worries about safety and even I know a lot of people are, have concerns about copyright. This is not an issue in China. Deep Seq does not care about copyright. There is no copyright rules in China. They have to abide by, they can use anything they want. So there's A lot of things that we focus on that they do not that allow them to be faster. And I think at this moment, because of what's going on at a national level, we're now trying to nationally compete with China. We're viewing them like we have our local companies competing with each other, but now this is like a national thing. And so it's, how do we get more compute for our AI companies? How do we get more energy for the data centers to be able to run? There's a lot of things on a national level that I think are going to start rolling out because of this. People are calling it the Sputnik moment, right with AI. So I'm very excited. I think that this technology is going to get much better. It's becoming a much bigger focus with a tool like this. I love the competition in the market and I don't think in any way that OpenAI is not up for the challenge. Sometimes they just got to be kicked into gear a little bit along with a bunch of these other companies. So, really excited to see what happens. Deep seek an impressive piece of technology and excited to see how this spurs the entire economy forward. Thanks so much for tuning in. If you enjoyed the podcast today, I would really appreciate it if you could leave a review wherever you get your podcast and I hope you all have a fantastic rest of your day.