Yes, well the narrative that rocked the stock market is different. Its looking at what DeepSeek did and assuming they may have competitive advantage in this space and could outperform OpenAI at their own game.

If the narrative is actually that DeepSeek can only reach whatever heights OpenAI has already gotten to with some new tricks, then markets will probably refocus on OpenAI's innovations and price things accordingly, even if the initial cost is huge. It also means OpenAI probably needs a better moat to protect its interests.

I'm not sure where the reality is exactly, but market reactions so far have basically followed that initial narrative and now the rebuttal.

The idea that someone can easily replicate an OpenAI model based simply on OpenAI outputs is, I’d argue, immeasurably worse for OpenAI’s valuation than the idea that someone happened to come up with a few innovations that leapfrogged OpenAI.

The latter could be a one time thing, and/or OpenAi Could still use their financial might to leverage those innovations and get even better with them.

However, the former destroys their business model and no amount of intelligence and innovation from OpenAI protects them from being copied at a fraction of the cost.

> Yes, well the narrative that rocked the stock market is different.

How do you know this?

> If the narrative is actually that DeepSeek can only reach whatever heights OpenAI has already gotten to with some new tricks, then markets will probably refocus on OpenAI's innovations and price things accordingly

Why? If every innovation OpenAI is trying to keep as secret sauce becomes commoditized quickly and cheaply, then why would markets care about any innovations they have? They will be unable to monetize them.

Couldn't OpenAI just put in their license that training off OpenAi output is not allowed? With shibboleth or API logs, this could be verifiable.

Why would it matter when Chinese deepseek is not going to abide by such rules or be forced to and will release their model open weights so anyone anywhere can host it?

Also, scraping most of the websites they scrape is also not allowed, they do it anyways

If they can make the US and Europe block the use of Deepseek and derivatives, they would be able to protect most of their market.

> I did not think this, nor did I think this was what others assumed.

That's what I thought and assumed. This is the narrative that's been running through all the major news outlets.

It didn't even occur to me that DeepSeek could have been training their models using the output of other models until reading this article.

Fwiw I assumed they were using o1 to train. But it doesn’t matter: the big story here is that massive compute resources are unlikely to be as important in the future as we thought. It cuts the legs off stargate etc just as it’s announced. The CCP must be highly entertained by the timeline.

That's only the case if you don't need to use the output of a much more expensive model.

There were different narratives for different people. When I heard about r1, my first response was to dig into their paper and it's references to figure out how they did it.