At a closed-door meeting attended by Congress and White House officials on Thursday, Altman stated that the rise of DeepSeek indicates that promoting the Stargate project to invest hundreds of billions in AI infrastructure in the USA 'is a great thing'; in the future, 'much more computing power' will be needed, both to improve AI models and to support the growing usage.
DeepSeek has recently shocked Silicon Valley and Wall Street with its cost-effective ChatGPT-like service, causing the USA's technology giants, which have invested hundreds of billions in developing AI applications in recent years, to face serious doubts about this model. It seems that OpenAI's CEO Sam Altman cannot sit still and has been revealed to emphasize in recent meetings with USA Congress and officials the necessity to continue investing heavily.
According to Bloomberg, during a closed-door meeting held in Washington on Thursday, January 30, Altman told attendees, including Congress and White House officials, that the rise of DeepSeek indicates that promoting the $100 billion-scale infrastructure project 'Stargate' co-founded by OpenAI is 'a great thing'.$SoftBank Group (9984.JP)$and$Oracle (ORCL.US)$It is reported that Altman and his team introduced new developments of OpenAI's products during the meeting, stating that AI developers are shifting towards enabling services to perform increasingly complex tasks. With technology companies launching more sophisticated products, 'we will need much more computing power' to improve AI models and support the growing usage.
Altman also revealed at the meeting that the Stargate project is currently bidding for future infrastructure sites.
Reports indicate that OpenAI executives spent months advocating to the Biden administration for the necessity of large-scale construction of datacenters in the USA. Now, faced with Trump, who is focused on domestic economic growth opportunities and concerns about China, these executives are providing messaging that aligns with his areas of concern. Meanwhile, DeepSeek is said to have developed services comparable to OpenAI at a far lower cost, complicating the narrative for OpenAI, which requires substantial investment.
Last Tuesday evening, Trump announced at the White House that OpenAI, SoftBank, and$Oracle Corp Japan (4716.JP)$will establish a joint venture called Stargate to jointly invest heavily in AI infrastructure. OpenAI also stated that the first round of investment in Stargate, amounting to 100 billion dollars, will "immediately begin deployment," and is expected to increase to 500 billion dollars within the next four years. SoftBank CEO Masayoshi Son will serve as chairman of the joint venture, with SoftBank assuming financial responsibility and OpenAI assuming operational responsibilities. The expansion of the first batch of AI datacenters by the new company is currently taking place in Texas.
Over the past weekend, DeepSeek gained immense popularity online by launching AI services comparable to OpenAI's ChatGPT at an extremely low cost, surpassing ChatGPT to top the free app rankings in the USA. Concerns over excessive hype in the AI industry quickly escalated. On Monday, USA technology stocks experienced a substantial downturn, with a total market cap evaporating by about 1 trillion dollars, with$NVIDIA (NVDA.US)$one company alone "bleeding" nearly 600 billion dollars, marking the largest market cap loss in the history of the US stock market, exceeding the total budget of Stargate.
Investors have always been cautious about AI companies claiming they need huge amounts of funding to train their models, especially in the absence of short-term profit plans. The sudden rise of DeepSeek seems to confirm these concerns. Notably, DeepSeek claims that the performance of its AI model can rival that of OpenAI, while the development cost represents only a small fraction of OpenAI's, raising doubts among investors about the reasonableness of high investments in AI companies.
Some analysts believe that if DeepSeek can survive with a smaller Datacenter, then big Technology companies may be spending too much on the Electrical Utilities for AI plans. Another Analyst stated that for venture capital fully invested in foundational model companies, the rise of DeepSeek could be a 'mass extinction level event.'
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