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submitted 4 days ago* (last edited 3 days ago) by Sulvor@hexbear.net to c/news@hexbear.net

I think we're about to get a crash in 5 hours folks

The companies known as the Magnificent Seven make up over 20% of the global stock market. And a lot of this is based on their perceived advantage when it comes to artificial intelligence (AI).

The big US tech firms hold all the aces when it comes to cash and computing power. But DeepSeek – a Chinese AI lab – seems to be showing this isn’t the advantage investors once thought it was.

DeepSeek doesn’t have access to the most advanced chips from Nvidia (NASDAQ:NVDA). Despite this, it has built a reasoning model that is outperforming its US counterparts – at a fraction of the cost.

Investors might be wondering about how seriously to take this. But Microsoft (NASDAQ:MSFT) CEO Satya Nadella is treating DeepSeek as the real deal at the World Economic Forum in Davos:

“It’s super impressive how effectively they’ve built a compute-efficient, open-source model. Developments like DeepSeek’s should be taken very seriously.”

Whatever happens with share prices, I think investors should take one thing away from the emergence of DeepSeek. When it comes to AI, competitive advantages just aren’t as robust as they might initially look.

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[-] piggy@hexbear.net 9 points 3 days ago* (last edited 3 days ago)

It doesn't work in the average case. I've seen this tactic from the company that I work for and multiple companies I have contacts at. Bosses think they can simply use "AI" to fix their hollowed out documentation, on-boarding, employee education systems by pushing a bunch of half correct, barely legible "documentation" through an LLM.

It just spits out garbage for 90% of people doing this. It's a garbage in garbage out process. In order for it to even be useful you need a specific type of LLM (a RAG) and for your documentation to be high quality.

Here's an example project: https://github.com/snexus/llm-search

The demo works well because it uses a well documented open source library. It's also not a guarantee that it won't hallucinate or get mixed up. A RAG works simply by priming the generator with "context" related to your query, if your model weights are strong enough your context won't outweigh the allure of statistical hallucination.

this post was submitted on 27 Jan 2025
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