Article by Michael A. Cusumano: “The release of DeepSeek V3 and R1 in January 2025 caused steep declines in the stock prices of companies that provide generative artificial intelligence (GenAI) infrastructure technology and datacenter services. These two large language models (LLMs) came from a little-known Chinese startup with approximately 200 employees versus at least 3,500 for industry-leader OpenAI. DeepSeek seemed to have developed this powerful technology much more cheaply than previously thought possible. If true, DeepSeek had the potential to disrupt the economics of the entire GenAI ecosystem and the dominance of U.S. companies ranging from OpenAI to Nvidia.
DeepSeek-R1 defines itself as “an artificial intelligence language model developed by OpenAI, specifically based on the generative pre-trained transformer (GPT) architecture.” Here, DeepSeek acknowledges that the transformer researchers (who published their landmark paper while at Google in 2017) and OpenAI developed its basic technology. Nonetheless, V3 and R1 display impressive skills in neural-network system design, engineering, and optimization, and DeepSeek’s publications provide rare insights into how the technology actually works. This column reviews, for the non-expert reader, what we know about DeepSeek’s origins, technology, and impact so far…(More)”.