News Summary

Demis Hassabis, CEO of Google’s DeepMind, has expressed skepticism regarding Chinese startup DeepSeek’s reported development costs for its latest AI model. DeepSeek claims to have developed its AI system for under $6 million, a figure Hassabis describes as ‘exaggerated and a little bit misleading.’ The announcement has led to discussions about the economics of AI development. Hassabis contends that DeepSeek only reported the cost of the final training round, which is a fraction of the total cost. The emergence of DeepSeek has caught significant attention as it claims to have spent $5.6 million on computing costs using older Nvidia chips. This claim has been met with skepticism from several researchers, and U.S. authorities have initiated an investigation to determine if DeepSeek circumvented a chip ban by making purchases through Singapore. Additionally, reports suggest that OpenAI and Microsoft are investigating whether a group associated with DeepSeek obtained data from OpenAI through distillation, a method where one AI model leverages outputs from another for training. Alphabet, Google’s parent company, maintains its substantial investment in AI infrastructure, recently announcing plans for $75 billion in capital expenditures in 2025, focusing on its cloud-computing division and services like Gemini.