Deepseek: Details Surface Amid Soft Numbers
February 7, 2025
We have smart software, but the dinobaby continues to do what 80 year olds do: Write the old-fashioned human way. We did give up clay tablets for a quill pen. Works okay.
I read “Research exposes Deepseek’s AI Training Cost Is Not $6M, It’s a Staggering $1.3B.” The assertions in the write up are interesting and closer to the actual cost of the Deepseek open source smart software. Let’s take a look at the allegedly accurate and verifiable information. Then I want to point out two costs not included in the estimated cost of Deepseek.
The article explains that the analysis for training was closer to $1.3 billion. I am not sure if this estimate is on the money, but a higher cost is certainly understandable based on the money burning activities of outfits like Microsoft, OpenAI, Facebook / Meta, and the Google, among others.
The article says:
In its latest report, SemiAnalysis, an independent research company, has spotlighted Deepseek, a rising player in the AI landscape. The SemiAnalysis challenges some of the prevailing narratives surrounding Deepseek’s costs and compares them to competing technologies in the market. One of the most prominent claims in circulation is that Deepseek V3 incurs a training cost of around $6 million.
One important point is that building and making available for free a smart software system incurs many costs. The consulting firm has narrowed its focus to training costs.
The write up reports:
The $6 million estimate primarily considers GPU pre-training expenses, neglecting the significant investments in research and development, infrastructure, and other essential costs accruing to the company. The report highlights that Deepseek’s total server capital expenditure (CapEx) amounts to an astonishing $1.3 billion. Much of this financial commitment is directed toward operating and maintaining its extensive GPU clusters, the backbone of its computational power.
But “astonishing.” Nope. Sam AI-Man tossed around numbers in the trillions. I am not sure we will ever know how much Amazon, Facebook, Google, and Microsoft — to name four outfits — have spent in the push to win the AI war, get a new monopoly, and control everything from baby cams to zebra protection in South Africa.
I do agree that the low ball number was low, but I think the pitch for this low ball was a tactic designed to see what a Chinese-backed AI product could do to the US financial markets.
There are some costs that neither the SemiAnalytics outfit or the Interesting Engineering wordsmith considered.
First, if you take a look at the authors of the Deepseek ArXiv papers you will see a lot of names. Most of these individuals are affiliated with Chinese universities. How we these costs handled? My hunch is that the costs were paid by the Chinese government and the authors of the paper did what was necessary to figure out how to come up with a “do more for less” system. The idea is that China, hampered by US export restrictions, is better at AI than the mythological Silicon Valley. Okay, that’s a good intelligence operation: Test destabilization with a reasonably believable free software gilded with AI sparklies. But the costs? Staff, overhead, and whatever perks go with being a wizard at a Chinese university have to be counted, multiplied by the time required to get the system to work mostly, and then included in the statement of accounts. These steps have not been taken, but a company named Complete Analytics should do the work.
Second, what was the cost of the social media campaign that made Deepseek more visible than the head referee of the Kansas City Chiefs and Philadelphia Eagle game? That cost has not been considered. Someone should grind through the posts, count the authors or their handles, and produce an estimate. As far as I know, there is no information about who is a paid promoter of Deepseek.
Third, how much did the electricity to get DeepSeek to do its tricks? We must not forget the power at the universities, the research labs, and the laptops. Technology Review has some thoughts along this power line.
Finally, what’s the cost of the overhead. I am thinking about the planning time, the lunches, the meetings, and the back and forth needed to get Deepseek on track to coincide with the new president’s push to make China not so great again? We have nothing. We need a firm called SpeculativeAnalytics for this task or maybe MasterCard can lend a hand?
Net net: The Deepseek operation worked. The recriminations, the allegations, and the explanations will begin. I am not sure they will have as much impact as this China smart, US dumb strategy. Plus, that SemiAnalytics’ name is a hoot.
Stephen E Arnold, February 7, 2025
Comments
Got something to say?
-
- Subscribe to Beyond Search
Feature archive
News archive
-
