Connect with us

Published

on

Dado Ruvic | Reuters

DeepSeek has rattled the U.S.-led AI ecosystem with its latest model, shaving hundreds of billions in chip leader Nvidia’s market cap. While the sector leaders grapple with the fallout, smaller AI companies see an opportunity to scale with the Chinese startup.

Several AI-related firms told CNBC that DeepSeek’s emergence is a “massive” opportunity for them, rather than a threat. 

“Developers are very keen to replace OpenAI’s expensive and closed models with open source models like DeepSeek R1…” said Andrew Feldman, CEO of artificial intelligence chip startup Cerebras Systems.

The company competes with Nvidia’s graphic processing units and offers cloud-based services through its own computing clusters. Feldman said the release of the R1 model generated one of Cerebras’ largest-ever spikes in demand for its services. 

“R1 shows that [AI market] growth will not be dominated by a single company — hardware and software moats do not exist for open-source models,” Feldman added. 

Open source refers to software in which the source code is made freely available on the web for possible modification and redistribution. DeepSeek’s models are open source, unlike those of competitors such as OpenAI.

DeepSeek also claims its R1 reasoning model rivals the best American tech, despite running at lower costs and being trained without cutting-edge graphic processing units, though industry watchers and competitors have questioned these assertions.

“Like in the PC and internet markets, falling prices help fuel global adoption. The AI market is on a similar secular growth path,” Feldman said. 

Inference chips 

DeepSeek could increase the adoption of new chip technologies by accelerating the AI cycle from the training to “inference” phase, chip start-ups and industry experts said.

Inference refers to the act of using and applying AI to make predictions or decisions based on new information, rather than the building or training of the model.

“To put it simply, AI training is about building a tool, or algorithm, while inference is about actually deploying this tool for use in real applications,” said Phelix Lee, an equity analyst at Morningstar, with a focus on semiconductors.  

While Nvidia holds a dominant position in GPUs used for AI training, many competitors see room for expansion in the “inference” segment, where they promise higher efficiency for lower costs.

AI training is very compute-intensive, but inference can work with less powerful chips that are programmed to perform a narrower range of tasks, Lee added.

A number of AI chip startups told CNBC that they were seeing more demand for inference chips and computing as clients adopt and build on DeepSeek’s open source model. 

“[DeepSeek] has demonstrated that smaller open models can be trained to be as capable or more capable than larger proprietary models and this can be done at a fraction of the cost,” said Sid Sheth, CEO of AI chip start-up d-Matrix. 

“With the broad availability of small capable models, they have catalyzed the age of inference,” he told CNBC, adding that the company has recently seen a surge in interest from global customers looking to speed up their inference plans. 

Robert Wachen, co-founder and COO of AI chipmaker Etched, said dozens of companies have reached out to the startup since DeepSeek released its reasoning models.

“Companies are [now] shifting their spend from training clusters to inference clusters,” he said. 

“DeepSeek-R1 proved that inference-time compute is now the [state-of-the-art] approach for every major model vendor and thinking isn’t cheap – we’ll only need more and more compute capacity to scale these models for millions of users.”

Jevon’s Paradox 

Analysts and industry experts agree that DeepSeek’s accomplishments are a boost for AI inference and the wider AI chip industry. 

“DeepSeek’s performance appears to be based on a series of engineering innovations that significantly reduce inference costs while also improving training cost,” according to a report from Bain & Company.

“In a bullish scenario, ongoing efficiency improvements would lead to cheaper inference, spurring greater AI adoption,” it added. 

This pattern explains Jevon’s Paradox, a theory in which cost reductions in a new technology drive increased demand.

Financial services and investment firm Wedbush said in a research note last week that it continues to expect the use of AI across enterprise and retail consumers globally to drive demand.

Speaking to CNBC’s “Fast Money” last week, Sunny Madra, COO at Groq, which develops chips for AI inference, suggested that as the overall demand for AI grows, smaller players will have more room to grow.

“As the world is going to need more tokens [a unit of data that an AI model processes] Nvidia can’t supply enough chips to everyone, so it gives opportunities for us to sell into the market even more aggressively,” Madra said.

Continue Reading

Technology

Alphabet becomes fourth company to reach $3 trillion market cap

Published

on

By

Alphabet becomes fourth company to reach  trillion market cap

Google CEO Sundar Pichai gestures to the crowd during Google’s annual I/O developers conference in Mountain View, California on May 20, 2025.

Camille Cohen | Afp | Getty Images

Alphabet has joined the $3 trillion club.

Shares of the search giant jumped more than 4% on Monday, pushing the company into territory occupied only by Nvidia, Microsoft and Apple.

The stock got a big lift in early September from an antitrust ruling by a judge, whose penalties came in lighter than shareholders feared. The U.S. Department of Justice wanted Google to be forced to divest its Chrome browser, and last year a district court ruled that the company held an illegal monopoly in search and related advertising.

But Judge Amit Mehta decided against the most severe consequences proposed by the DOJ, which sent shares soaring to a record. After the big rally, President Donald Trump congratulated the company and called it “a very good day.”

Read more CNBC tech news

Alphabet shares are now up more than 30% this year, compared to the 15% gain for the Nasdaq.

The $3 trillion milestone comes roughly 20 years after Google’s IPO and a little more than 10 years after the creation of Alphabet as a holding company, with Google its prime subsidiary.

CEO Sundar Pichai was named CEO of Alphabet in 2019, replacing co-founder Larry Page. Pichai’s latest challenge has been the surge of new competition due to the rise of artificial intelligence, which the company has had to manage through while also fending off an aggressive set of regulators in the U.S. and Europe.

The rise of Perplexity and OpenAI ended up helping Google land the recent favorable antitrust ruling. The company’s hopes of becoming a major AI player largely ride with Gemini, Google’s flagship suite of AI models.

WATCH: EU fines Google almost $3 billion

EU fines Google almost $3 billion over AdTech practices, reports say

Continue Reading

Technology

Bessent: TikTok deal ‘framework’ reached with China, Trump and Xi will finalize it Friday

Published

on

By

Bessent: TikTok deal 'framework' reached with China, Trump and Xi will finalize it Friday

Samuel Boivin | Nurphoto | Getty Images

The U.S. and China have reached a ‘framework’ deal for social media platform TikTok, Treasury Secretary Scott Bessent said Monday.

“It’s between two private parties, but the commercial terms have been agreed upon,” he said from U.S.-China talks in Madrid.

Both President Donald Trump and Chinese President Xi Jinping will meet Friday to discuss the terms. Trump also said in a Truth Social post Monday that a deal was reached “on a ‘certain’ company that young people in our Country very much wanted to save.”

Bessent indicated that the framework could pivot the platform to U.S.-controlled ownership.

TikTok did not immediately respond to a request for comment.

The comments came during the latest round of trade discussions between the U.S. and China. Relations have soured between the two countries in recent months from Trump’s tariffs and other trade restrictions.

At the same time, TikTok parent company ByteDance faces a Sept. 17 deadline to divest the platform’s U.S. business or face being shut down in the country.

U.S. Trade Representative Jamieson Greer said Monday that the deadline may need to be pushed back to get the deal signed, but there won’t be ongoing extensions.

Read more CNBC tech news

Congress passed a law last year prohibiting app store operators like Apple and Google from distributing TikTok in the U.S. due to its “foreign adversary-controlled application” status.

But Trump postponed the shutdown in January, signing an executive order in January that gave ByteDance 75 more days to make a deal. Further extensions came by way of executive orders in April and in June.

Commerce Secretary Howard Lutnick said in July that TikTok would shutter for Americans if China doesn’t give the U.S. more autonomy over the popular short-form video app.

As for who controls the platform, Trump told Fox News in June that he had a group of “very wealthy people” ready to buy the app and could reveal their identities in two weeks. The reveal never came.

He has previously said he’d be open to Oracle Chairman Larry Ellison or Tesla CEO Elon Musk buying TikTok in the U.S. Artificial intelligence startup Perplexity has submitted a bid for an acquisition, as has businessman Frank McCourt’s Project Liberty internet advocacy group, CNBC reported in January.

Trump told CNBC in an interview last year that he believed the platform was a national security threat, although the White House started a TikTok account in August.

White House launches TikTok account

Continue Reading

Technology

Why is Sam Altman losing sleep? OpenAI CEO addresses controversies in sweeping interview

Published

on

By

Why is Sam Altman losing sleep? OpenAI CEO addresses controversies in sweeping interview

Sam Altman, CEO of OpenAI, and Lisa Su, CEO of Advanced Micro Devices, testify during the Senate Commerce, Science and Transportation Committee hearing titled “Winning the AI Race: Strengthening U.S. Capabilities in Computing and Innovation,” in Hart building on Thursday, May 8, 2025.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

In a sweeping interview last week, OpenAI CEO Sam Altman addressed a plethora of moral and ethical questions regarding his company and the popular ChatGPT AI model.  

“Look, I don’t sleep that well at night. There’s a lot of stuff that I feel a lot of weight on, but probably nothing more than the fact that every day, hundreds of millions of people talk to our model,” Altman told former Fox News host Tucker Carlson in a nearly hour-long interview. 

“I don’t actually worry about us getting the big moral decisions wrong,” Altman said, though he admitted “maybe we will get those wrong too.” 

Rather, he said he loses the most sleep over the “very small decisions” on model behavior, which can ultimately have big repercussions.

These decisions tend to center around the ethics that inform ChatGPT, and what questions the chatbot does and doesn’t answer. Here’s an outline of some of those moral and ethical dilemmas that appear to be keeping Altman awake at night.

How does ChatGPT address suicide?

According to Altman, the most difficult issue the company is grappling with recently is how ChatGPT approaches suicide, in light of a lawsuit from a family who blamed the chatbot for their teenage son’s suicide.

The CEO said that out of the thousands of people who commit suicide each week, many of them could possibly have been talking to ChatGPT in the lead-up.

“They probably talked about [suicide], and we probably didn’t save their lives,” Altman said candidly. “Maybe we could have said something better. Maybe we could have been more proactive. Maybe we could have provided a little bit better advice about, hey, you need to get this help.” 

Jay Edelson on OpenAI wrongful death lawsuit: We're putting OpenAI & Sam Altman on trial, not AI

Last month, the parents of Adam Raine filed a product liability and wrongful death suit against OpenAI after their son died by suicide at age 16. In the lawsuit, the family said that “ChatGPT actively helped Adam explore suicide methods.”

Soon after, in a blog post titled “Helping people when they need it most,” OpenAI detailed plans to address ChatGPT’s shortcomings when handling “sensitive situations,” and said it would keep improving its technology to protect people who are at their most vulnerable. 

How are ChatGPT’s ethics determined?

Another large topic broached in the sit-down interview was the ethics and morals that inform ChatGPT and its stewards. 

While Altman described the base model of ChatGPT as trained on the collective experience, knowledge and learnings of humanity, he said that OpenAI must then align certain behaviors of the chatbot and decide what questions it won’t answer. 

“This is a really hard problem. We have a lot of users now, and they come from very different life perspectives… But on the whole, I have been pleasantly surprised with the model’s ability to learn and apply a moral framework.” 

When pressed on how certain model specifications are decided, Altman said the company had consulted “hundreds of moral philosophers and people who thought about ethics of technology and systems.”

An example he gave of a model specification made was that ChatGPT will avoid answering questions on how to make biological weapons if prompted by users.

“There are clear examples of where society has an interest that is in significant tension with user freedom,” Altman said, though he added the company “won’t get everything right, and also needs the input of the world” to help make these decisions.

How private is ChatGPT?

Another big discussion topic was the concept of user privacy regarding chatbots, with Carlson arguing that generative AI could be used for “totalitarian control.”

In response, Altman said one piece of policy he has been pushing for in Washington is “AI privilege,” which refers to the idea that anything a user says to a chatbot should be completely confidential. 

“When you talk to a doctor about your health or a lawyer about your legal problems, the government cannot get that information, right?… I think we should have the same concept for AI.” 

OpenAI CEO Sam Altman on path to profitability: Willing to run at a loss to focus on growth

According to Altman, that would allow users to consult AI chatbots about their medical history and legal problems, among other things. Currently, U.S. officials can subpoena the company for user data, he added.

“I think I feel optimistic that we can get the government to understand the importance of this,” he said. 

Will ChatGPT be used in military operations?

Just how powerful is OpenAI?

Carlson, in his interview, predicted that on its current trajectory, generative AI and by extension, Sam Altman, could amass more power than any other person, going so far as to call ChatGPT a “religion.”

In response, Altman said he used to worry a lot about the concentration of power that could result from generative AI, but he now believes that AI will result in “a huge up leveling” of all people. 

“What’s happening now is tons of people use ChatGPT and other chatbots, and they’re all more capable. They’re all kind of doing more. They’re all able to achieve more, start new businesses, come up with new knowledge, and that feels pretty good.”

However, the CEO said he thinks AI will eliminate many jobs that exist today, especially in the short-term.

Continue Reading

Trending