The Deepseek takeaway

Investment Analysis Clubs Macro Economic Trends and Risks
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AI will be using a lot less energy than previously forecast. A lot less hardware than previously forecast. Will create a lot less revenue than might have been previously forecast.

NVDA is losing sales not because Deepseak will make a dent. Because other developers will find ways to make a dent.

The number of cost-saving maneuvers out there is unknown. There are plenty of them in all likelihood.

The ultimate AI operating system grabs up all the apps as Microsoft used in days of old, and sells them as a package.

But in the days of ā€œas a serverā€ that might be impossible.

Al la carte will be wildly competitive.

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Are They?

jevons paradox

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Compared to the forecast yes.

There was a certain growing computational load that is now going to see greater and greater efficiencies than expected.

Will AI be advanced faster? Yes.

But no killer app so far.

Honestly about the killer app comments. I do not know that. It is a grey area. I am repeating, parroting, another person who claims that. So name a killer app or two if it is wrong? But show me the money.

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Really?

Sort of like how the transition from mainframes to PCs caused a lot less hardware to be built and less power used? Or from PCs to smart phones?

Mike

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Compared to the forecasts last week, absolutely.

The reduction potential in energy usage is a gift to humanity.

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Cheaper to train AI models means it costs less, so more companies will offer AI this and AI that. More people will use AI to do frivolous things. More energy used.

Mike

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We were going that way regardless. You can not pretend we will use any more than we would have. The theory that we were holding back otherwise does not hold any water.

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No pretending needed. Look at how much internet is used for entertainment purposes

Hereā€™s a table (generated by ChatGPT) the average percentage of bandwidth consumed for each use case:

Rank Use Case Description Average Bandwidth Consumption (%)
1 Video Streaming Watching videos on platforms like YouTube, Netflix, and Hulu. 60%
2 Online Gaming Playing games over the internet, including multiplayer and cloud gaming. 10%
3 Video Conferencing Using services like Zoom, Microsoft Teams, and Google Meet for meetings. 8%
4 File Downloading Downloading large files, software updates, and media content. 7%
5 Social Media Browsing and interacting on platforms like Facebook, Instagram, and TikTok. 6%
6 Web Browsing Accessing websites, reading articles, and online shopping. 5%
7 Cloud Services Using cloud storage and applications like Google Drive and Dropbox. 2%
8 Music Streaming Listening to music on services like Spotify, Apple Music, and Pandora. 1%
9 Online Education Participating in online courses and webinars. 0.5%
10 Email Sending and receiving emails, especially with large attachments. 0.5%

Mike

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Great but we are talking forward-looking forecasts.

NVDA and others were gearing up for massive energy needs. Some of the plans for small nuclear reactors are being dropped.

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Do you have a link for that?

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Scuttlebutt but there is a lot of chatter if you do a Google search.

This from yesterday.

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A lot of Scuttlebutt going around. It has been said that deepseek was started by a hedge fund that went short NVDA before this announcement.

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Thatā€™s another point but that and a dime wonā€™t buy me a cup of coffee.

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I agree that is why I ignore Scuttlebutt.

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I have long suspected that IRR planners would quietly shelve the mini nukes. Now that is on more than likely in many cases. They do not make economic sense.

Google AI

It appeared to have similar functionality as OpenAIā€™s ChatGPT chatbot, which can do things like write poetry when queried. DeepSeek says its model uses roughly 10 to 40 times less energy than similar U.S. AI technology ā€” a reduction that seemingly would sharply cut the need for energy-gobbling data centers.