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DeepSeek’s Reasoning Capabilities Need To Be Questioned

Published
Mark Minevich
Published
By Mark Minevich
Edited by Samantha Dunn

Key Takeaways

  • DeepSeek’s claims defy well-established cost and compute realities known to AI professionals.
  • The lack of scrutiny reflects a broader issue that can harm real progress.
  • Many in the industry have accepted bold technical claims without evidence.

When I first read about DeepSeek’s alleged $6 million development price , I thought of the old adage, “If something seems too good to be true, it probably is.”

The world of tech, especially AI, has been upheaval in the weeks since this news. But no one earnestly addresses the truth.

We’re being sold a computational fairy tale.

A Reference for Reality

Journalists and industry “experts” seem to believe that DeepSeek cracked the code for efficient reasoning. Anyone who’s spent time working in the industry and living it the way I have for decades knows this is absurd.

Think of it this way. Let’s say ten contractors are coming to your house to quote a bathroom remodel. The first nine give you a quote between $9,000 and $11,000 for the job. Then, the tenth contractor shows up and tells you he can do it for $1,000.

That’s exactly what I felt and thought when I heard the DeepSeek news.

The truth is that DeepSeek’s reasoning capabilities demand up to 100 times what previous models required. Is this actual innovation or simply brute force disguised as a breakthrough?

The reason this isn’t being reported on more often or simply called out is that most tech reporters have never used these systems in production environments. They haven’t seen with their own eyes servers straining under the load of these models.

They also haven’t looked at the bills from the electric company that follow. The danger comes when one reporter unfamiliar with live-working AI quotes the previous reporting of another reporter with no live production experience.

That’s how a lie unintentionally becomes an accepted reality.

“The Answer to all Your questions Is Money” – Don Ohlmeyer

The industry was far too quick to take DeepSeek’s claims at face value. It was labeled a breakthrough! The AI field was instantaneously leveled!

At the utterance of the words “only six million dollars,” there should have been a complete and full stop.

AI follows a simple yet ironclad law of existence; better reasoning requires more computation, more energy pull, more infrastructure, and more investment. To claim the world now has more for a fraction of historical costs? This is not a statement centered in reality.

Do tech companies simply love spending billions on building enormous data centers for fun? Do we think these tech giants say, “Hey, you know what would be great? Smaller margins.” No.

You don’t lead an industry and create the cutting edge by being inefficient and irresponsible with your financial resources.

Every dollar spent on AI infrastructure and computational increases is spent because it is absolutely necessary.

Information Warfare in the World of AI

The AI race is becoming one of information warfare as much as one of technological advancement. 

We are now distracted by the shiny new toy under the AI Christmas tree while our competitors and adversaries build larger models with greater computational demands. Was that the point or part of the reasoning behind DeepSeek’s claims upon launch?

This quick acceptance of DeepSeek’s claims puts us in danger of lowering our standards as to what constitutes evidence. We cannot accept press releases with the same gravity as peer-reviewed research.

Before we accept DeepSeek’s claims as reality, let’s ask the hard questions about what’s really happening behind their demos and cost claims.

Remember, if something seems too good to be true, it probably is.

Disclaimer: The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.
About the Author

Mark Minevich

Mark is a founding partner and Chairman of Going Global Ventures, New York-based investment, technology, and strategic advisory firm dedicated to leading high-growth tech clients to success in the global digital economy. GGV advises large global enterprises and brands both in the US, EU, South America and Japan and collaborates with leading investment organizations and private wealth focused on digitalization and Artificial Intelligence.
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