Business
What is DeepSeek? And How Is It Upending A.I.?
Tech stocks tumbled. Giant companies like Meta and Nvidia faced a barrage of questions about their future. Tech executives took to social media to proclaim their fears.
And it was all because of a little-known Chinese artificial intelligence start-up called DeepSeek.
DeepSeek caused waves all over the world on Monday as one of its accomplishments — that it had created a very powerful A.I. model with far less money than many A.I. experts thought possible — raised a host of questions, including whether U.S. companies were even competitive in A.I. anymore.
DeepSeek is “AI’s Sputnik moment,” Marc Andreessen, a tech venture capitalist, posted on social media on Sunday.
How could a company that few people had heard of have such an effect?
What is DeepSeek?
DeepSeek is a start-up founded and owned by the Chinese stock trading firm High-Flyer. Its goal is to build A.I. technologies along the lines of OpenAI’s ChatGPT chatbot or Google’s Gemini. By 2021, DeepSeek had acquired thousands of computer chips from the U.S. chipmaker Nvidia, which are a fundamental part of any effort to create powerful A.I. systems.
In China, the start-up is known for grabbing young and talented A.I. researchers from top universities, promising high salaries and an opportunity to work on cutting-edge research projects. Both High-Flyer and DeepSeek are run by Liang Wenfeng, a Chinese entrepreneur.
Over the past few years, DeepSeek has released several large language models, which is the kind of technology that underpins chatbots like ChatGPT and Gemini. On Jan. 10, it released its first free chatbot app, which was based on a new model called DeepSeek-V3.
Why did the stock market react to it now?
When DeepSeek introduced its DeepSeek-V3 model the day after Christmas, it matched the abilities of the best chatbots from U.S. companies like OpenAI and Google. That alone would have been impressive.
But the team behind the new system also revealed a bigger step forward. In a research paper explaining how it built the technology, DeepSeek said it used only a fraction of the computer chips that leading A.I. companies relied on to train their systems.
The world’s top companies typically train their chatbots with supercomputers that use as many as 16,000 chips or more. DeepSeek’s engineers said they needed only about 2,000 Nvidia chips.
Why is that important?
Since late 2022, when OpenAI set off the A.I. boom, the prevailing notion had been that the most powerful A.I. systems could not be built without investing billions of dollars in specialized A.I. chips. That would mean that only the biggest tech companies — such as Microsoft, Google and Meta, all of which are based in the United States — could afford to build the leading technologies.
(The New York Times has sued OpenAI and its partner, Microsoft, claiming copyright infringement of news content related to A.I. systems. The two tech companies have denied the suit’s claims.)
But DeepSeek’s engineers said they needed only about $6 million in raw computing power to train their new system. That was roughly 10 times less than what Meta spent building its latest A.I. technology.
How did DeepSeek make its tech with fewer A.I. chips?
Top A.I. engineers in the United States say that DeepSeek’s research paper laid out clever and impressive ways of building A.I. technology with fewer chips.
In short, the startup’s engineers demonstrated a more efficient way of analyzing data using the chips. Leading A.I. systems learn their skills by pinpointing patterns in huge amounts of data, including text, images and sounds. DeepSeek described a way of spreading this data analysis across several specialized A.I. models — what researchers call a “mixture of experts” method — while minimizing the time lost by moving data from place to place.
Others have used similar methods before, but moving information between the models tended to reduce efficiency. DeepSeek did this in a way that allowed it to use less computing power.
“It has become very clear that other companies, not just someone like OpenAI, can build these kinds of systems,” said Tim Dettmers, a researcher at the Allen Institute for Artificial Intelligence in Seattle and a professor of computer science at Carnegie Mellon University who specializes in building efficient A.I. systems. “DeepSeek used methods that anyone can duplicate.”
DeepSeek’s research paper raised questions about whether big U.S. companies could maintain a significant lead in A.I. Many experts believe that A.I. technology will become a commodity, with many companies selling much the same product.
Is DeepSeek’s tech as good as systems from OpenAI and Google?
DeepSeek-V3 can answer questions, solve logic problems and write its own computer programs as effectively as anything already on the market, according to standard benchmark tests.
Just before DeepSeek released its technology, OpenAI had unveiled a new system, called OpenAI o3, which seemed more powerful than DeepSeek-V3. But OpenAI has not released this system to the wider public.
OpenAI o3 was designed to “reason” through problems involving math, science and computer programming. Many experts pointed out that DeepSeek had not built a reasoning model along these lines, which is seen as the future of A.I.
Then on Jan. 20, DeepSeek released its own reasoning model called DeepSeek R1, and it, too, impressed the experts. That eventually sent U.S. investors and others into a panic late last week and over the weekend as they realized the importance of DeepSeek’s new technology.
U.S. tech giants are building data centers with specialized A.I. chips. Does this still matter, given what DeepSeek has done?
Yes, it still matters.
Large numbers of A.I. chips can still help companies in many ways. With more chips, they can run more experiments as they explore new ways of building A.I. In other words, more chips can still give companies a technical and competitive advantage.
More chips will also be needed to operate the new breed of “reasoning” A.I. models, experts said. These require more computing power when people and businesses use them.
Hasn’t the United States limited the number of Nvidia chips sold to China?
Yes. To maintain the U.S. lead in the global A.I. race, the Biden administration had put in place rules limiting the number of powerful chips that could be sold to China and other rivals.
But the impressive performance of the DeepSeek model raised questions about the unintended consequences of the American government’s trade restrictions. The controls have forced researchers in China to get creative with a wide range of tools that are freely available on the internet.
Some experts continue to argue in favor of U.S. trade restrictions, saying that they were only recently put in place and that they will have a greater effect on China’s abilities to create A.I. as the years pass.
Does DeepSeek’s tech mean that China is now ahead of the United States in A.I.?
No. The world has not yet seen OpenAI’s o3 model, and its performance on standard benchmark tests was more impressive than anything else on the market. But experts are concerned that China is jumping ahead on open-source A.I. systems.
What exactly is open-source A.I.?
Like many other companies, DeepSeek has “open sourced” its latest A.I. system, which means that it has shared the underlying computer code with other businesses and researchers. This allows others to build and distribute their own products using the same technologies.
This is part of the reason DeepSeek and others in China have been able to build competitive A.I. systems so quickly and inexpensively.
In the A.I. world, open source first gathered steam in 2023 when Meta freely shared an A.I. system called Llama. At the time, many assumed that the open-source ecosystem would flourish only if companies like Meta — giant firms with huge data centers filled with specialized chips — continued to open source their technologies.
But DeepSeek and others have shown that this ecosystem can thrive in ways that extend beyond the American tech giants.
Why is that important?
Many experts have argued that the big U.S. companies should not open source their technologies because they could be used to spread disinformation or cause other serious harm. Some U.S. lawmakers have explored the possibility of preventing or throttling the practice.
But other experts have argued that if regulators stifle the progress of open-source technology in the United States, China will gain a significant edge. If the best open-source technologies come from China, these experts argue, U.S. researchers and companies will build their systems atop those technologies.
In the long run, that could put China at the heart of A.I. research and development, which could further accelerate its effort to build a wide range of A.I. technologies, including autonomous weapons and other military systems.
The luxury shopping center in Pacific Palisades will reopen next month after more than $100 million in renovations forced by the January 2025 wildfire that devastated the Los Angeles neighborhood.
Palisades Village will reopen Aug. 15, owner Rick Caruso announced Wednesday. The outdoor center survived the blaze that destroyed homes and other businesses but needed refurbishment to eliminate contaminants that the fire could have spread.
Crews are putting finishing touches on mall buildings after tearing them down to the studs, treating the wood and rebuilding the walls, Caruso said.
“Everybody’s working, and stores are moving their products in,” he said. “It’s a really cool feeling that people have really locked arms and are working together.”
An electrician installs lighting for a restaurant at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
Pacific Palisades resident Allison Polhill, who is rebuilding the home of 30 years that her family lost in the blaze, said she is “thrilled” at the prospect of returning to the mall she used to frequent. Its comeback is a boost for the community, she said.
“Every single step that we make to reopen our commercial corridors is going to bring more people back into the Palisades,” said Polhill, who expects to move back into her home at the end of August.
A total of 6,822 structures were destroyed in the Palisades fire, including more than 5,500 residences and 100 commercial businesses, according to the California Department of Forestry and Fire Protection.
Caruso previously attributed the mall’s survival to the hard work of private firefighters and the fire-resistant materials used in the mall’s construction.
The $200-million shopping and dining center opened in 2018 with a movie theater and a roster of upmarket tenants, including Erewhon, which may be the only grocer in the heart of the fire-ravaged neighborhood when it opens.
Caruso’s company was able to fill the mall with tenants despite the long shutdown.
Palisades Village is 99% leased, with the majority of tenants returning, said Jackie Levy, chief financial and revenue officer. Nearly one-third of the shops and restaurants are new to the property.
A firefighter carries a hose back to his rig while walking through a destroyed home from the Palisades fire in Pacific Palisades on Jan. 7, 2025.
(Genaro Molina / Los Angeles Times)
Last year, Pacific Palisades-based fashion designer Elyse Walker said she would reopen her eponymous store in Palisades Village after losing her 25-year flagship location on Antioch Street to the inferno.
Other neighborhood shops destroyed in the fire that are reopening at the mall include K Bakery and Loomey’s Toys, which caters to children up to age 12 and used to be across the street from Palisades Elementary Charter School.
“It’s been a journey and I’m excited because I wasn’t sure that there was going to be a place to come back to,” said toy store owner Amanda Rastegar. “Hopefully we can bring some of that magic back.”
Rastegar’s home in the Palisades survived but was damaged by the fire. The family returned about eight weeks ago. Her last memory of the fire was a burning supermarket.
“I just couldn’t wrap my brain around what was happening,” she said. “By the time I left, Gelson’s was on fire.”
Among the returning tenants is Angelini Ristorante & Bar. Well-known Los Angeles chef Gino Angelini said he will be in the kitchen next month for a return of the Italian restaurant.
“We won’t do a big celebrity open,” he said. “We want to have a very soft opening and see our customers come back.”
Construction takes place at Rick Caruso’s Palisades Village on Thursday. The shopping center is scheduled to reopen mid-August.
(Myung J. Chun / Los Angeles Times)
An elaborate celebration would not feel “correct for me,” Angelini said, because the devastation has been “very sad” for so many.
Other new tenants include local chef Nancy Silverton, who has agreed to move in with a new Italian steakhouse called Spacca Tutto. Women’s activewear retailer LESET will open its first West Coast location.
Caruso said he is optimistic that customers will return to the center, even though many Pacific Palisades residents are still dispersed. One tracking system estimated that about 30% of the Village’s customer base was impacted by the fire, he said.
“That means 70% did not get impacted, so there’s a lot of customers still left out there,” Caruso said. Historically, the center drew customers from as far away as Beverly Hills and Calabasas, as well as Malibu, Brentwood and Santa Monica.
He also hopes many will be inspired to visit the revived mall.
“I believe in the goodness of people and I believe that people are going to want to support the Palisades,” he said. “They’re going to want to be there and support the businesses that have had the courage and the heart to reopen.”
Walmart is rapidly expanding its network of electric vehicle chargers designed for customers to use while they shop.
The network could help fill gaps in EV infrastructure in states with greater need for chargers. Walmart, which has more than 5,000 locations in the U.S. and hundreds in California, says more than 90% of Americans live within 10 miles of one of its stores.
The chargers also offer an incentive for customers to choose Walmart — Walmart Plus members will receive a 10% discount off an average price of $0.46 per kilowatt-hour of energy at the company’s chargers.
Walmart chargers are already available at more than 75 locations in 17 states, with Texas boasting the most charging stations, followed by Florida and Arizona.
Matthew Nelson, Walmart’s director of energy policy, said last week on LinkedIn that the network will soon reach 29 states, including California.
“We are delivering on the promise of affordable, reliable and convenient charging,” Nelson said in his post.
According to Walmart’s website, six charging stations are coming to California soon, though the company did not offer a specific timeline.
The chargers will be installed at stores in Antelope, Brea, Fresno, Stockton, Suisun City and Vallejo.
Most charging sites in California will include eight to 16 fast-charging stalls, said Walmart spokesperson Kelsey Bohl.
The company first announced plans in April 2023 to install its own EV chargers at Walmart and Sam’s Club stores, with a goal of installing thousands of chargers by 2030. Partnering with ABB E-Mobility and Alpitronic, it added 25 new charging sites this past May and six more in June.
“Walmart is building a leading retail-integrated EV fast-charging network, focused on delivering an affordable, reliable and convenient charging experience where customers already shop,” Bohl said in an emailed statement. “Customers can charge while they shop, access stations through the Walmart app they already use, and benefit from affordable pricing.”
The charging stations already available include 612 individual charging stalls using 400-kilowatt chargers. Each stall has a dual charging cord with both Combined Charging System and North American Charging Standard connectors. The standard connectors, designed by Tesla, are smaller and lighter than the combined systems.
The primary way to pay for the chargers is through the Walmart app, but the company is also experimenting with built-in credit card readers to allow those without the app to use the stations.
Customers can check charger availability on the Walmart app. The company said the chargers will be available 24 hours a day.
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
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