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The All-In Podcast #200 · January 31, 2025 · 100m
DeepSeek Shockwave, AI Costs Plummeting, China's AI Strategy
China's DeepSeek releases an AI model comparable to GPT-4 at a fraction of the training cost. The besties debate whether this invalidates the US AI infrastructure investment thesis, whether China's AI strategy is working, and whether compute moats are real.
Canon
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US export controls denied China access to NVIDIA's best GPUs. Instead of stopping Chinese AI, this constraint forced DeepSeek to innovate algorithmically — producing more efficient models. The restriction became the advantage.
Highlights
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DeepSeek proves that compute moats are weaker than assumed — algorithmic innovation can substitute for brute-force compute
DeepSeek achieved GPT-4-level performance with reportedly $6M in training costs versus OpenAI's hundreds of millions. If true, the entire thesis of 'whoever has the most GPUs wins' is wrong — algorithmic efficiency can substitute for compute scale.