As reactions continue, the word in Washington, and out of OpenAI, is distillation. They’re accusing DeepSeek of distilling o1, of ripping off OpenAI. They claim DeepSeek *gasp* violated the OpenAI Terms of Service! The horror.

And they are very cross about this horrible violation, and if proven they plan to ‘aggressively treat it as theft,’ while the administration warns that we must put a stop to this.

Aside from the fact that this is obviously very funny, and that there is nothing they could do about it in any case, is it true?

Meanwhile Anthropic's Dario Amodei offers a reaction essay, which also includes a lot of good technical discussion of why v3 and r1 aren’t actually all that unexpected along the cost and capability curves over time, calling for America to race towards AGI to gain decisive strategic advantage over China via recursive self-improvement, although [...]

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Outline:

(01:01) Seeking Deeply

(01:41) The Market Is In DeepSeek

(06:42) Machines Not of Loving Grace

(17:49) The Kinda Six Million Dollar Model

(18:59) v3 Implies r1

(20:32) Two Can Play That Game

(21:21) Janus Explores r1's Chain of Thought Shenanigans

(24:42) In Other DeepSeek and China News

(27:29) The Quest for Sane Regulations

(29:53) Copyright Confrontation

(37:24) Vibe Gap

(41:09) Deeply Seeking Safety

(42:15) Deeply Seeking Robotics

(45:14) Thank You For Your Candor

(48:21) Thank You For Your Understanding

(51:17) The Lighter Side

The original text contained 1 footnote which was omitted from this narration.

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The avalanche of DeepSeek news continues. We are not yet spending more than a few hours at a time in the singularity, where news happens faster than it can be processed. But it's close, and I’ve had to not follow a bunch of other non-AI things that are also happening, at least not well enough to offer any insights.

So this week we’re going to consider China, DeepSeek and r1 fully split off from everything else, and we’ll cover everything related to DeepSeek, including the policy responses to the situation, tomorrow instead.

This is everything else in AI from the past week. Some of it almost feels like it is from another time, so long ago.

I’m afraid you’re going to need to get used to that feeling.

Also, I went on Odd Lots to discuss DeepSeek, where I was and truly hope to again [...]

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Outline:

(00:55) Language Models Offer Mundane Utility

(02:47) Language Models Don't Offer Mundane Utility

(05:43) Language Models Don't Offer You In Particular Mundane Utility

(10:49) (Don't) Feel the AGI

(12:36) Huh, Upgrades

(16:08) They Took Our Jobs

(21:30) Get Involved

(22:04) Introducing

(23:38) In Other AI News

(27:10) Hype

(29:56) We Had a Deal

(31:43) Quiet Speculations

(37:14) The Quest for Sane Regulations

(39:40) The Week in Audio

(39:51) Don't Tread on Me

(45:42) Rhetorical Innovation

(55:22) Scott Sumner on Objectivity in Taste, Ethics and AGI

(01:04:41) The Mask Comes Off (1)

(01:06:58) The Mask Comes Off (2)

(01:09:12) International AI Safety Report

(01:10:37) One Step at a Time

(01:14:12) Aligning a Smarter Than Human Intelligence is Difficult

(01:18:54) Two Attractor States

(01:26:51) You Play to Win the Game

(01:28:10) Six Thoughts on AI Safety

(01:35:53) AI Situational Awareness

(01:40:15) People Are Worried About AI Killing Everyone

(01:43:40) Other People Are Not As Worried About AI Killing Everyone

(01:44:24) The Lighter Side

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It's been another *checks notes* two days, so it's time for all the latest DeepSeek news.

You can also see my previous coverage of the r1 model and, from Monday various reactions including the Panic at the App Store.

Table of Contents

First, Reiterating About Calming Down About the [...]

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Outline:

(00:20) First, Reiterating About Calming Down About the $5.5 Million Number

(01:58) OpenAI Offers Its Congratulations

(05:54) Scaling Laws Still Apply

(12:07) Other r1 and DeepSeek News Roundup

(16:06) People Love Free

(18:45) Investigating How r1 Works

(23:40) Nvidia Chips are Highly Useful

(24:52) Welcome to the Market

(30:02) Ben Thompson Weighs In

(33:01) Import Restrictions on Chips WTAF

(35:37) Are You Short the Market

(39:52) DeepSeeking Safety

(43:11) Mo Models Mo Problems

(50:23) What If You Wanted to Restrict Already Open Models

(53:33) So What Are We Going to Do About All This?

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No one is talking about OpenAI's Operator. We’re, shall we say, a bit distracted.

It's still a rather meaningful thing that happened last week. I too have been too busy to put it through its paces, but this is the worst it will ever be, and the least available and most expensive it will ever be. The year of the agent is indeed likely coming.

So, what do we have here?

Hello, Operator

OpenAI has introduced the beta for its new agent, called Operator, which is now live for Pro users and will in the future be available to Plus users, ‘with more agents to launch in the coming weeks and months.’

Here is a 22 minute video demo. Here is the system card.

You start off by optionally specifying a particular app (in the first demo, OpenTable) and then give it a [...]

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Outline:

(00:28) Hello, Operator

(02:44) Risky Operation

(04:34) Basic Training

(06:29) Please Stay on the Line

(12:08) For a Brief Survey

(16:34) The Number You Are Calling Is Not Available (In the EU)

(17:20) How to Get Ahead in Advertising

(19:05) Begin Operation

(20:11) The Lighter Side

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DeepSeek released v3. Market didn’t react.

DeepSeek released r1. Market didn’t react.

DeepSeek released a f***ing app of its website. Market said I have an idea, let's panic.

Nvidia was down 11%, Nasdaq is down 2.5%, S&P is down 1.7%, on the news.

Shakeel: The fact this is happening today, and didn’t happen when r1 actually released last Wednesday, is a neat demonstration of how the market is in fact not efficient at all.

That is exactly the market's level of situational awareness. No more, no less.

I traded accordingly. But of course nothing here is ever investment advice.

Given all that has happened, it seems worthwhile to go over all the DeepSeek news that has happened since Thursday. Yes, since Thursday.

For previous events, see my top level post here, and additional notes on Thursday.

To avoid confusion: r1 [...]

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Outline:

(01:27) Current Mood

(03:04) DeepSeek Tops the Charts

(07:42) Why Is DeepSeek Topping the Charts?

(09:47) What Is the DeepSeek Business Model?

(13:48) The Lines on Graphs Case for Panic

(16:31) Everyone Calm Down About That $5.5 Million Number

(25:42) Is The Whale Lying?

(29:33) Capex Spending on Compute Will Continue to Go Up

(32:53) Jevon's Paradox Strikes Again

(36:24) Okay, Maybe Meta Should Panic

(39:02) Are You Short the Market

(43:52) o1 Versus r1

(47:23) Additional Notes on v3 and r1

(50:12) Janus-Pro-7B Sure Why Not

(50:44) Man in the Arena

(52:42) Training r1, and Training With r1

(56:34) Also Perhaps We Should Worry About AI Killing Everyone

(59:21) And We Should Worry About Crazy Reactions To All This, Too

(01:02:14) The Lighter Side

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There was a comedy routine a few years ago. I believe it was by Hannah Gadsby. She brought up a painting, and looked at some details. The details weren’t important in and of themselves. If an AI had randomly put them there, we wouldn’t care.

Except an AI didn’t put them there. And they weren’t there at random.

A human put them there. On purpose. Or, as she put it:

THAT was a DECISION.

This is the correct way to view decisions around a $500 billion AI infrastructure project, announced right after Trump takes office, having it be primarily funded by SoftBank, with all the compute intended to be used by OpenAI, and calling it Stargate.

Table of Contents

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Outline:

(00:49) The Announcement

(05:21) Is That a Lot?

(09:37) What Happened to the Microsoft Partnership?

(11:03) Where's Our 20%?

(12:10) Show Me the Money

(17:23) It Never Hurts to Suck Up to the Boss

(24:44) What's in a Name

(29:01) Just Think of the Potential

(34:00) I Believe Toast is an Adequate Description

(36:05) The Lighter Side

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Break time is over, it would seem, now that the new administration is in town.

This week we got r1, DeepSeek's new reasoning model, which is now my go-to first choice for a large percentage of queries. The claim that this was the most important thing to happen on January 20, 2025 was at least non-crazy. If you read about one thing this week read about that.

We also got the announcement of Stargate, a claimed $500 billion private investment in American AI infrastructure. I will be covering that on its own soon.

Due to time limits I have also pushed coverage of a few things into next week, including this alignment paper, and I still owe my take on Deliberative Alignment.

The Trump administration came out swinging on many fronts with a wide variety of executive orders. For AI, that includes repeal of the [...]

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Outline:

(01:24) Language Models Offer Mundane Utility

(10:54) Language Models Don't Offer Mundane Utility

(17:20) Huh, Upgrades

(20:03) Additional Notes on r1

(22:41) Fun With Media Generation

(23:18) We Tested Older LLMs and Are Framing It As a Failure

(26:56) Deepfaketown and Botpocalypse Soon

(32:10) They Took Our Jobs

(47:15) Get Involved

(47:54) Introducing

(51:38) We Had a Deal

(01:07:17) In Other AI News

(01:18:39) Whistling in the Dark

(01:22:03) Quiet Speculations

(01:28:09) Suchir's Last Post

(01:29:43) Modeling Lower Bound Economic Growth From AI

(01:34:42) The Quest for Sane Regulations

(01:39:53) The Week in Audio

(01:42:51) Rhetorical Innovation

(01:49:37) Cry Havoc

(01:53:14) Aligning a Smarter Than Human Intelligence is Difficult

(01:59:34) People Strongly Dislike AI

(02:02:23) People Are Worried About AI Killing Everyone

(02:05:17) Other People Are Not As Worried About AI Killing Everyone

(02:09:29) The Lighter Side

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r1 from DeepSeek is here, the first serious challenge to OpenAI's o1.

r1 is an open model, and it comes in dramatically cheaper than o1.

People are very excited. Normally cost is not a big deal, but o1 and its inference-time compute strategy is the exception. Here, cheaper really can mean better, even if the answers aren’t quite as good.

You can get DeepSeek-r1 on HuggingFace here, and they link to the paper.

The question is how to think about r1 as it compares to o1, and also to o1 Pro and to the future o3-mini that we’ll get in a few weeks, and then to o3 which we’ll likely get in a month or two.

Taking into account everything I’ve seen, r1 is still a notch below o1 in terms of quality of output, and further behind o1 Pro and the future o3-mini [...]

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Outline:

(01:43) Part 1: RTFP: Read the Paper

(03:38) How Did They Do It

(06:19) The Aha Moment

(08:27) Benchmarks

(09:46) Reports of Failure

(11:11) Part 2: Capabilities Analysis

(11:16) Our Price Cheap

(15:44) Other People's Benchmarks

(18:20) r1 Makes Traditional Silly Mistakes

(23:11) The Overall Vibes

(25:36) If I Could Read Your Mind

(28:06) Creative Writing

(32:21) Bring On the Spice

(34:33) We Cracked Up All the Censors

(39:44) Switching Costs Are Low In Theory

(42:15) The Self-Improvement Loop

(44:18) Room for Improvement

(48:27) Part 3: Where Does This Leave Us on Existential Risk?

(48:58) The Suicide Caucus

(51:21) v3 Implies r1

(53:09) Open Weights Are Unsafe And Nothing Can Fix This

(58:59) So What the Hell Should We Do About All This?

(01:05:53) Part 4: The Lighter Side

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As always, some people need practical advice, and we can’t agree on how any of this works and we are all different and our motivations are different, so figuring out the best things to do is difficult. Here are various hopefully useful notes.

Table of Contents

Effectiveness of GLP-1 Drugs

GLP-1 drugs are so effective that the American obesity rate is falling.

John Burn-Murdoch: While we can’t be certain that the [...]

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Outline:

(00:22) Effectiveness of GLP-1 Drugs

(01:09) What Passes for Skepticism on GLP-1s

(03:21) The Joy of Willpower

(10:07) Talking Supply

(10:44) Talking Price

(13:36) GLP-1 Inhibitors Help Solve All Your Problems

(14:12) Dieting the Hard Way

(18:41) Nutrients

(19:46) Are Vegetables a Scam?

(22:46) Government Food Labels Are Often Obvious Nonsense

(23:33) Sleep

(28:34) Find a Way to Enjoy Exercise

(32:28) A Note on Alcohol

(33:04) Focus Only On What Matters

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There's going to be some changes made.

Table of Contents

Out With the Fact Checkers

Mark Zuckerberg has decided that with Donald Trump soon to be in office, he is allowed to care about free speech again. And he has decided it is time to admit that what was called ‘fact checking’ meant he had for years been running a giant hugely biased, trigger-happy and error prone left-wing censorship and moderation machine that had standards massively out of touch with ordinary people and engaged in automated taking down of often innocent accounts.

He also admits that the majority of censorship in the past has flat out [...]

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Outline:

(00:08) Out With the Fact Checkers

(01:21) What Happened

(04:05) Timing is Everything

(05:29) Balancing Different Errors

(06:25) Truth and Reconciliation

(08:06) Fact Check Fact Check

(11:33) Mistakes Will Be Made

(16:11) Where We Go From Here

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