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DeepSeek says it built its chatbot cheap. What does that mean for AI's energy needs and the climate?

Jan 29, 2025 - financialpost.com
Chinese AI startup DeepSeek has claimed to have developed a highly popular chatbot at a fraction of the cost compared to American tech giants, raising questions about the energy needs of AI technology. The company reportedly spent only $5.6 million to train its flagship model, significantly less than the billions spent by competitors like ChatGPT. This development could imply a reduced need for energy-intensive data centers, which are projected to consume a growing share of U.S. electricity. However, experts suggest that even if AI becomes more efficient, its increased use could still drive up energy demand.

DeepSeek's chatbot has quickly become the top downloaded free app on Apple's iPhone, surpassing U.S.-made chatbots. The startup's approach, using a less powerful AI chip due to U.S. export controls, has intrigued analysts and could influence future AI model development. Despite the potential for more efficient AI, experts believe that the demand for data centers and electricity will continue to grow, though possibly at a slower rate. The situation underscores the importance of integrating renewable energy sources to power these facilities sustainably.

Key takeaways:

  • DeepSeek, a Chinese AI startup, claims to have developed a popular chatbot at a significantly lower cost than American tech companies, raising questions about the energy needs of AI technology.
  • The energy consumption of AI is a concern for climate change, as it primarily relies on fossil fuels, and U.S. tech companies are investing heavily in energy-intensive data centers.
  • DeepSeek's chatbot, built with a relatively low-performing AI chip, has become the top downloaded free app on Apple's iPhone, surpassing U.S.-made chatbots like ChatGPT and Google's Gemini.
  • If AI becomes more efficient, it could reduce the need for data centers, potentially easing energy demands and allowing more time to scale up renewable energy sources.
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