DeepSeek jolts AI industry: Why AI’s next leap may not come from more data, but more compute at inference
1 min read
Summary
Recent developments in AI, such as DeepSeek’s ability to create high-performance models at a low cost, are challenging established paradigms in the industry.
This has led to a focus on “test-time compute” as a potential driver of AI progress, as reasoning models can improve overall model performance without the need for additional training data.
There are implications for the competitive landscape of the AI market, including the opportunity for newer labs with lower budgets to create state-of-the-art models.
There may also be a shift towards specialized AI hardware that can provide faster inference-time compute, and cloud providers that can provide quality of service assurances could have a competitive advantage.
Enterprise AI adoption and SaaS may be influenced by security and privacy concerns, and vertical specialization could gain traction as an application layer.