Deep Impact 🇨🇳 🇺🇸

👀 TLDR

In this week’s What’s Appening, we cover the AI startup that has shaken the world - DeepSeek. The Chinese company has released its AI chatbot, which is able to compete with ChatGPT in areas like reasoning. The big difference? It was trained for a fraction of the cost. It sent the US AI sector into a panic. We also have news on the health of the global app economy in 2024, Meta’s AI spending boom, X’s big deal with Visa, and more!

🎬 Our Top Take

🇨🇳 🇺🇸 AI – China’s DeepSeek Model Rattles US AI Sector

Mere days after the announcement of Stargate, a $500 billion AI infrastructure fund backed by the US Government, a Chinese startup has thrown Silicon Valley, Washington, and Wall Street into panic. DeepSeek r1 is a reasoning model similar to – and apparently just as adept as – OpenAI’s o1. That, in itself, is not big news, as competing AI models are released all the time. The panic comes from the low GPU cost of training it – just $5.7 million (the company claims). When you consider the billions spent in training costs by OpenAI and others, you can appreciate just what a shock it was to see a similarly capable model built for peanuts. Nvidia, the chip-making company whose fortunes rose with the AI boom, lost $600 billion in value yesterday – the biggest drop in stock market history. Some have called it a Sputnik moment, recalling the advent of the Space Race. Others have questioned the veracity of the cost claims of the Chinese startup. What we do know is that DeepSeek works well, although it seems to be censored when you ask it about stuff like Tiananmen Square. It also currently sits on top of the App Store, but in keeping up with the chaos, new registrations have been limited due to a reported cyber-attack on the platform #SputnikAI Read more here.

📲 App of the Week: DeepSeek FullMoon (w/ DeepSeek)

While we covered the impact of DeepSeek above, we thought we would tell you a little more about the app that everyone is talking about. It’s a free AI chatbot & search agent that looks a lot like ChatGPT. It doesn’t have all of ChatGPT’s features, such as image generation, but it does match OpenAI’s o1 model for reasoning. The R1 model has 670 billion parameters, making it the biggest open-source LLM around, which, along with the cost, is attractive for developers. If you are worried about giving over your data to a Chinese company, particularly given what has gone on with TikTok, you can stay private by accessing DeepSeek via Fullmoon or Perplexity.

🧐 Stat of the Week: 13% Rise

📈📉 App Spending – Sensor Tower’s Annual Report Shows AI Influence

Sensor Tower’s State of Mobile gave us a glimpse of the app economy in 2024. One of the headlines is that spending on the app ecosystem continues to soar, up 13% across 2024 to $150B globally. Apps mentioning AI were downloaded 17B times across the year, whereas in-app spending on AI chatbots tripled, although this still represents just a small piece of the pie at $1.1B. You can access the report here. #StateOfMobile Read more here.

🗞️ Other Stories

📍 Meanwhile at 3Advance

The 3A team was in town last week, so on Friday, as is customary, we hosted a Happy Hour at Ireland’s Four Courts in Arlington. And yes, we had a blast! Surrounded by friends, clients, and partners, and we even had a few surprise (for some of us) visits from former team members! For those that joined us, thank you! And for those who missed out, you need to read the end of these emails. ;) Anyway, the cold January weather didn’t thwart the fun. If you missed out this time, no worries. There will be more opportunities… Sure, St Patrick’s Day is just around the corner, and we’ll have a major launch to coincide with that! Till then, the DC crew is always around for coffee, a pint, or on Zoom, so reach out anytime!

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