DeepSeek: Taking on big AI
In a frenetic week that saw the land of the free adjusting to the sunlit uplands of the second golden age of Trump, the billionaire tech bros club left the smouldering remains of California to reconvene in Washington to kiss the presidential ring. One of the more august gatherings involved Masayoshi Son, Larry Ellison and Sam Altman popping into the Oval Office to announce the launch of Stargate, which plucked some enormous numbers out of thin air to be ploughed into building AI infrastructure.
Even cheerleader-in-chief Elon Musk raised a quizzical eyebrow at the numbers being thrown around, and the MAGA squad’s conviction that bigger is always better was put into sharp context by DeepSeek, a Chinese start-up that operates on a budget that big tech would classify as more like a tip than an investment. Washington has been doing all it can to scupper China’s chances of competing in AI, so the likes of DeepSeek have had to box clever and innovate rather than merely hurling dollars at the problem.
Started as a side hustle by hedge fund manager Liang Wenfeng, its AI model DeepSeek V3 used far from cutting-edge Nvidia chips to train the model in two months at the cost of a paltry $5.5m.
Liang funds the company from profits generated by his hedge fund, and pays its locally trained engineers the highest salaries in the sector. In what must be a particularly alarming development for the big spenders in Silicon Valley, DeepSeek’s technology is all open source and it has no need to monetise anything, so it can devote its efforts to pure research.
DAZN: Not quite fighting fit
DAZN, which aficionados of global sports streaming services will know is pronounced Da Zone, is pouring billions of Leonard Blavatnik’s pounds into its ambitious plan to become the Spotify of sports.
After an aggressive acquisition spree, it is broadcasting live and on-demand sports programming in more than 200 countries, and is expanding its offering into in-play betting, gaming, e-commerce, merchandising and ticketing.
It has a portfolio that runs from European football, basketball, NFL and combat sports to more niche offerings, and it is the only place to go if you live in Austria or Germany and you want to watch competitive woodchopping.
While it has amassed about 20-million subscribers and had about 300-million monthly customers in 2023, it has struggled to convert its growing ubiquity into anything like a profit. Revenues were up from $2.2bn in 2022 to $2.9bn in 2023, but losses widened from $1.2bn to $1.4bn, and Blavatnik had to tip in a further $827m, taking his total investment to more than $6.7bn since 2016.
It’s a pretty substantial bet even for a man whose net worth is estimated by Forbes at $32.1bn, but Blavatnik is clearly no muppet. He made his fortune in the chaos of the collapse of the Soviet Union, emerging victorious in the aluminium wars then reinventing himself as a pillar of the establishment in the UK with a knighthood for services to philanthropy, deftly avoiding any sanctions or impromptu exits from lofty hotel windows.
Unfortunately for DAZN, Netflix and Amazon Prime are muscling in on the sports sector, which should set the scene for a proper punch-up.
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