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I literally cannot see how OpenAI and Anthropic can justify their valuation given DeepSeek. In business, if you can provide twice the value at half the price, y

by sdesol 2y ago

I literally cannot see how OpenAI and Anthropic can justify their valuation given DeepSeek. In business, if you can provide twice the value at half the price, you will destroy the incumbent. Right now, DeepSeek is destroying on price and provides somewhat equivalent value compared to Sonnet. I still believe Sonnet is better, but I don't think it is 10 times better. Something else that DeepSeek can do, which I am not saying they are/will, is they could train on questionable material like stolen source code and other things that would land you in deep shit in other countries. DeepSeek just needs to improve the value and I can see them destroying Anthropic since I believe coding is their main focus. When it comes to text processing, I personally find GPT to be much better and that might also have to do with allegations that they trained on literature that they should not have.

EMIRELADERO 2y ago
> Something else that DeepSeek can do, which I am not saying they are/will, is they could train on questionable material like stolen source code and other things that would land you in deep shit in other countries. I don't think that's true. There's no scenario where training on the entire public internet is deemed fair use but training on leaked private code is not, because both are ultimately the same thing (copyright infringement allegations) And it's not even something I just made up, the law explicitly says it: "The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."[0] [0] https://www.law.cornell.edu/uscode/text/17/107 https://www.law.cornell.edu/uscode/text/17/107
- XorNot 2y ago
  It's a Chinese service hosted in China. They absolutely do not care, and on this front the CCP will definitely back them up.
  - j-a-a-p 2y ago
    Nonsense - there is already a decade plus of litigation on copyright and sorts with China. The days you could find carbon copied designs in China are of the past.
laluser 2y ago
Why? Just look at the last year for how cheap inference and almost all models have gone down in price. OpenAI has 100s of millions of daily active users, with huge revenues. They already know there will be big jumps like this as there have in the past and they happen quickly. If anything, this is great for them, they can offer a better product with less quotas as they are severely compute bottlenecked. It's a win-win situation for them.
- sdesol 2y ago
  > OpenAI has 100s of millions of daily active users, with huge revenues. My rational is we are dealing with a commodity product. People will go where the best answer is. I only use DeepSeek because it is good. If it was free, but sucked, I would not use it. Honestly, I do hope they (OpenAI) offer a better product but as it currently stands, I will not use their models because they don't offer enough value for the price.
qeternity 2y ago
> I still believe Sonnet is better, but I don't think it is 10 times better. Sonnet doesn't need to be 10 times better. It just needs to be better enough such that the downstream task improves more than the additional cost. This is a much more reasonable hurdle. If you're able to improve the downstream performance of something that costs $500k/year by 1% then the additional cost of Sonnet just has to be less than $5k/year for there to be positive ROI. I'm a big fan of DeepSeek. And the VC funded frontier labs may be screwed. But I don't think R1 is terminal for them. It's still a very competitive field.
- sdesol 2y ago
  > But I don't think R1 is terminal for them. I hope not, as I we need more competition.

by sdesol 2y ago

EMIRELADERO 2y ago

> Something else that DeepSeek can do, which I am not saying they are/will, is they could train on questionable material like stolen source code and other things that would land you in deep shit in other countries. I don't think that's true. There's no scenario where training on the entire public internet is deemed fair use but training on leaked private code is not, because both are ultimately the same thing (copyright infringement allegations) And it's not even something I just made up, the law explicitly says it: "The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."[0] [0] https://www.law.cornell.edu/uscode/text/17/107 https://www.law.cornell.edu/uscode/text/17/107

XorNot 2y ago
It's a Chinese service hosted in China. They absolutely do not care, and on this front the CCP will definitely back them up.
- j-a-a-p 2y ago
  Nonsense - there is already a decade plus of litigation on copyright and sorts with China. The days you could find carbon copied designs in China are of the past.

laluser 2y ago

Why? Just look at the last year for how cheap inference and almost all models have gone down in price. OpenAI has 100s of millions of daily active users, with huge revenues. They already know there will be big jumps like this as there have in the past and they happen quickly. If anything, this is great for them, they can offer a better product with less quotas as they are severely compute bottlenecked. It's a win-win situation for them.

sdesol 2y ago
> OpenAI has 100s of millions of daily active users, with huge revenues. My rational is we are dealing with a commodity product. People will go where the best answer is. I only use DeepSeek because it is good. If it was free, but sucked, I would not use it. Honestly, I do hope they (OpenAI) offer a better product but as it currently stands, I will not use their models because they don't offer enough value for the price.

qeternity 2y ago

> I still believe Sonnet is better, but I don't think it is 10 times better. Sonnet doesn't need to be 10 times better. It just needs to be better enough such that the downstream task improves more than the additional cost. This is a much more reasonable hurdle. If you're able to improve the downstream performance of something that costs $500k/year by 1% then the additional cost of Sonnet just has to be less than $5k/year for there to be positive ROI. I'm a big fan of DeepSeek. And the VC funded frontier labs may be screwed. But I don't think R1 is terminal for them. It's still a very competitive field.

sdesol 2y ago
> But I don't think R1 is terminal for them. I hope not, as I we need more competition.