Nvidia’s $589B DeepSeek rout

I gave it an easy one, “How many of the actors from the original Star Trek are still alive”. It gave me accurate information as of its training cut off date. But ChatGPT automatically did a web search to validate its answer. I had to choose the search option for it to look up later info.

With ChatGPT even when it doesn’t do a web search automatically, I can either tell it to “validate this” or put in my prompt “validate all answers by doing a web lookup”.

Then I gave it a simple compounding interest problem with monthly payments and wanted a month by month breakdown. DeepSeek used its multi step reasoning like o1 and was slower. ChatGPT 4o just created a Python script and used its internal Python interpreter.

Then DeepSeek started timing out.

This is the presentation of “what are some of the best places to eat in Chicago?”

https://chatgpt.com/share/6799510f-f4a8-8010-b80d-100c95d36d...

It doesn’t show on the shared link. But in the app it gives you a map of the restaurants or you can choose a list.

I can’t share a conversation with DeepSeek (?). But suffice it to say, the interface wasn’t as good.

I’m not saying the underlying technology of DeepSeek isn’t “good enough”. But the end user product is severely lacking.

Fundamentally, this kind of problem is the same as language translation, text comprehension, or coding tasks. It just tests where the boundaries are of the LLM capabilities by pushing it to its limits.

I've noticed the LLMs bumping up against those very same limits in ordinary coding tasks. For example, if you have a prefix-suffix type naming convention for identifiers, depending on how the tokenizer splits these, the LLMs can either do very well or get muddled up. Similarly, they're not great at spotting small typos with very long identifiers because in their internal vector representations the correct and typo versions are very "close".

This is not actually a reason for investors to invest in a company, because it's caused by investors investing in the company. If the market would invest in some other company instead then that company would have huge amounts of money to invest in developing new technologies. Meanwhile the ones that tend to succeed in that are more often new, nimble companies breaking into or creating a new market rather than large established ones with bureaucracy, internal politics and fear of cannibalizing existing sales.

Example: If there is a popular new application for consumer GPUs that requires a lot of VRAM, a competitor could make a lot of money by developing consumer GPUs with a lot of VRAM, but Nvidia would have to worry about that eroding sales of enterprise GPUs. Then investing in the competitor could have a better return, both because of potentially higher growth (people invest $5B in developing the GPU and then it becomes a $100B+ company, huge ROI; very little chance of Nvidia going from $3T to $60T), and because when it happens it comes at the expense of the incumbent, who loses not just the consumer GPU sales but the enterprise ones to the competitor selling for consumer prices. Which means the incumbent still has a very significant risk of losing value, but without as much potential upside.

People often try to make this argument by pointing to Microsoft or Apple, but those are major outliers who got there through anti-trust violations. Meanwhile Kodak, Xerox, Yahoo, AOL, Sears, IBM, GM, GE, etc.

> very little of the stock market is about the actual value of the company itself, but speculation

That's the hype cycle. We know which section of the graph we're on right now.