The Influence of China's DeepSeek AI on the Crypto Market, Here's the Impact!

Bittime - DeepSeek AI is an artificial intelligence laboratory from China, successfully shaking up the world of technology with its revolutionary, cost-efficient AI models.

With a development cost of only about $5 million, DeepSeek created a model that rivals or even surpasses OpenAI's GPT-4o and Anthropic's Claude 3.5 Sonnet in a variety of benchmark tests.

Is it true that DeepSeek AI's accuracy reaches 90%?

DeepSeek AI's success was achieved through the use of innovative techniques such as 8-bit training (FP8) which reduces memory requirements by up to 75% compared to FP16 which is more commonly used by American companies.

Additionally, a “multi-token” method that processes phrases simultaneously makes the model twice as fast with 90% accuracy. The technique challenges traditional approaches that require large resources and are expensive.

Standard Web Tools AI Crashes

DeepSeek reportedly also employs “distillation,” a technique that allows small models to replicate the results of large models without training on the same database. With a “mixture of experts” system, the model activates only 37 billion of the total 671 billion parameters at one time, resulting in high efficiency.

That efficiency has a big impact on costs. DeepSeek's API price is only 10 cents per million tokens, much cheaper than similar services which charge $4.40.

It allows users to process up to 200,000 API requests for just 50 cents, making it a top choice for developers looking for a cost-effective solution.

DeepSeek AI's Direct Impact to the Crypto Market

DeepSeek AI's superiority created the “DeepSeek Effect,” which rocked the crypto market. Many AI crypto tokens experienced a decline in value as investors began to question the merits of these projects amidst the incredible efficiency that DeepSeek offers.

This phenomenon even triggered the emergence of many fake tokens that tried to take advantage of DeepSeek's fame to deceive investors.

In addition, the decline in the share value of hardware companies such as Nvidia and AMD and software such as Microsoft, Meta, and Google adds to uncertainty in the market. 

With lower training and operational costs, the dominance of tech giants in the AI ​​industry looks to be faltering, opening up opportunities for smaller players with similar innovations.

New Paradigms in AI Development

DeepSeek's success challenges the long-held assumption that AI development requires large data centers and expensive hardware. This has the potential to level the competitive field, turning the huge advantages that technology companies have into mere temporary advantages.

The cost-effective approach is forcing big companies like OpenAI and Anthropic to reevaluate their strategies.

Within days of DeepSeek's announcement, OpenAI CEO Sam Altman reportedly halted his aggressive monetization efforts, while the DeepSeek app soared to the top of the productivity category on iOS.

The World's Response to the DeepSeek Revolution

DeepSeek's announcement comes amid massive investment in AI infrastructure by the United States, including the $500 billion Stargate project involving President Trump, Sam Altman, and the founders of Oracle.

On the other hand, Mark Zuckerberg's commitment to pouring large funds into AI development at Meta is in the spotlight, especially after the DeepSeek model showed much better efficiency.

Prominent investors like Chamath Palihapitiya call the development of traditional AI models a “money trap.”

The statement reflects market sentiment that DeepSeek's efficiency and innovation have changed the game, forcing large companies to reevaluate their spending.

Conclusion

DeepSeek AI has not only changed the way the industry views the development of artificial intelligence but has also had a significant impact on the crypto market and technology as a whole.

The resulting cost efficiencies and technical innovations provide a huge opportunity for smaller companies to compete, while putting pressure on tech giants to adapt. Is the future of AI really changing?

FAQ DeepSeek AI

1. What makes DeepSeek AI different from other AI models?

DeepSeek AI uses innovative approaches such as 8-bit training (FP8), multi-token system, and “mixture of experts” which makes it much more efficient than traditional models.

The technique enables cost reductions of up to 95%, while maintaining equivalent or better performance than popular AI models such as GPT-4o and Claude 3.5 Sonnet.

2. How will DeepSeek AI impact the crypto market?

The cost efficiency and performance of DeepSeek AI rocked the crypto market, leading to a decline in the value of AI tokens and the emergence of many fake tokens. Investors are starting to question the viability of expensive AI-based crypto projects, especially as DeepSeek offers solutions at much more affordable prices.

3. Will the success of DeepSeek AI impact large tech companies?

Yes, the success of DeepSeek AI is forcing big companies like OpenAI and Meta to reevaluate their strategies. With lower operational costs, this model proves that AI development does not always require large investments, thus shaking the dominance of giant technology companies.

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References

• Decrypt News, Why China's DeepSeek AI Is Blowing Everyone's Minds—And Blowing Up the Market, accessed on January 28, 2025

  Penulis: Fkey