DeepSeek R1 Is Going Viral — What’s the Hype About?

Lately, DeepSeek R1 has been making waves in my (admittedly chaotic) info bubble, hitting the top charts in the US downloads.

What is it?
Essentially, it’s like ChatGPT, but built by our Chinese colleagues and trained on more modest hardware. Despite that, R1 is already benchmarking at GPT-4o and Claude 3.5 Sonnet levels, even surpassing them in some cases.

The biggest buzz?
They’ve launched an insanely cheap API, which is already rolling out. The API is compatible with OpenAI’s API format — so now could be the perfect time to jump in and launch something text-processing related while the hype is fresh.

Market Reaction & My Thoughts

The market is a bit shaken by this news — not in a good way. On top of that, Powell is expected to speak this week, and I’m not expecting anything good in terms of price action. But hey, markets love to surprise, right?

In the long run, the growing AI rivalry between China and the US is great news — more acceleration, lower costs, and increased investment and interest in the space. China was lagging a bit in the AI race, but it looks like they’re making a comeback now.

Exciting times ahead.