AI Update: Deepseek

On January 20th, a small Chinese startup, DeepSeek, created a significant stir in the AI industry with the release of their advanced machine learning model, DeepSeek AI. This new tool has proven to be just as effective as some of the most expensive AI chatbots on the market, but at a fraction of the operational costs—and completely free for users. This development has been particularly noteworthy given the extremely high costs associated with training and running models like OpenAI's GPT-4.

DeepSeek has not only highlighted the potential for cost-efficient AI solutions but has also sparked discussions around its Chinese ownership. Similar to the concerns raised with platforms like TikTok, there are questions about data privacy and the implications of China's cybersecurity laws. Below, we discuss the strengths and weaknesses of this new player on the scene, along with security considerations to keep in mind.

Unique Chatbot Features

Cost Efficiency: As of right now, all DeepSeek models are free to use. Training and running its models is also cheaper compared to competitors. For instance, DeepSeek-V3 reportedly cost under $6 million to train, while OpenAI’s GPT-4 is estimated to cost more than $5.4 billion per year to operate.

Technical Innovations: DeepSeek uses a Mixture-of-Experts architecture, which means it only activates the parts of the model needed for a specific task. This helps reduce both energy usage and running costs.

Performance: In some benchmark tests—especially in coding and mathematical tasks—DeepSeek has performed on par with or even surpassed well-known AI models from industry leaders like OpenAI.

Privacy Concerns

DeepSeek’s privacy policy notes that your data (such as IP addresses, device IDs, cookies, and potentially sensitive information like date of birth and email) may be stored on servers outside your home country, including servers in China. It also retains a record of your queries, uploaded files, prompts, and chat history, and can log proof of identity if you contact the company.

Similar to the privacy concerns surrounding TikTok, DeepSeek's Chinese ownership raises questions about data access and sharing beyond Australia’s jurisdiction. Users should be aware that data shared with the platform could be subject to government access under China’s cybersecurity laws, which require companies to provide data upon request by authorities.

Emerging technologies often draw political scrutiny—sometimes justifiably, sometimes less so. While caution and careful oversight are crucial when using AI tools like DeepSeek, we believe that as long as you’re working with unclassified or anonymised data, and doing so in a way that is consistent with your organisation’s AI usage policies, DeepSeek can be a valuable asset.

Strengths and Weaknesses vs. Other Chatbots

Strengths

• Open-Source Flexibility: Certain versions of DeepSeek are open-source, allowing developers to customise the model and giving users more visibility into how it works.

• Technical and Coding Prowess: DeepSeek Coder excels at generating and debugging code, making it a handy tool for developers or researchers handling complex technical challenges.

• Specialised Expertise: Its strong performance in scientific and technical domains can be a major plus for organisations dealing with research-oriented tasks.

• Cost Efficiency: You can often get comparable results to other AI tools without the same level of expenses, which can be appealing for businesses with tighter budgets.

• Offline Capabilities: Unlike some competitors, DeepSeek can be run locally—no internet required. Using platforms like Ollama, you can install DeepSeek on your machine and operate it offline.

Weaknesses

• Newer Platform: With less time in the market, it hasn’t undergone as much real-world testing as its more established counterparts.

• Smaller Community: Fewer users means fewer discussion forums, plug-ins, or ready-made resources—so there might be a steeper learning curve if you need help.

• Limited Documentation: The available guides and tutorials are growing but still lag behind the extensive resources you’d find for older AI platforms.

• Fewer Integration Options: DeepSeek doesn’t yet offer as many built-in connections with third-party tools as competitors like ChatGPT or Microsoft’s ecosystem.

• Ownership Concerns: Because DeepSeek is owned by a Chinese startup, some people worry about data privacy and the possibility of government access. This is something to keep in mind, especially if your organisation has strict AI policies.

Conclusion

DeepSeek AI does pose some privacy considerations, but it also offers notable benefits in flexibility, technical capabilities, and cost-efficiency. If you don’t yet have an AI usage policy, we highly recommend putting one together. A comprehensive policy can help you mitigate risks and get the most out of AI tools in the workplace. Whether you need guidance on crafting an AI policy or want to explore how DeepSeek AI (or other AI solutions) can power your business, get in touch with us here—we would love to help.