The news of DeepSeek’s breakthrough R1 program that rivals ChatGPT-4 made waves through the artificial intelligence and data center industry on Monday. What DeepSeek’s revelation does is upend the business model and cost structure of many giant companies. But for POET, DeepSeek has two benefits:
1. It Opens More Markets: DeepSeek claims to reduce the number of GPUs needed to perform similar tasks as ChatGPT-4 from 100,000 to 2,000, according to one researcher. It also says it can lower the price by up to 90%. While the veracity of those numbers are still debatable, if true, the potential disruption of DeepSeek is not debatable.
“DeepSeek's innovative techniques, cost-efficient solutions and optimization strategies have had an undeniable effect on the AI landscape,” writes Janakiram MSV, a Forbes senior contributor.
What the application will do is make AI more accessible to more companies and more individuals. For POET, that means more opportunity through the addition of many more potential customers. What DeepSeek does is create a need for greater physical layer connectivity for AI clusters, which is what the POET Optical Interposer™ and the products built from its foundation are designed to achieve. An innovation such as DeepSeek allows more players to enter the AI field and when that happens, POET’s optical engines have the chance to be adopted by a larger number of end users.
POET believes that our optical applications offer the best price over competing alternatives as well as a significant decrease in heat output, which is a necessity for hyperscalers, AI systems companies, and anyone else looking to enter the AI world.
2. It Proves Our Point About Disruption: DeepSeek is primarily a large language model (LLM) and the fact it can collapse costs for its users while improving performance over its competitors is enough to cause the shockwaves in the stock markets that we have seen in the past few days. Disruptive players drive the high-tech sector and POET is a disruptor on the hardware side of the industry.
The cost-benefit and efficiency that DeepSeek brings to the world of AI software has similarities to the value proposition of the POET Optical Interposer. We have engineered a way to do more with less, thereby eliminating pricey labor and assembly costs while providing the economies of scale needed to meet the manufacturing demand for optical connectivity. POET has thoroughly documented our technology.
How DeepSeek R1 achieves its performance is still opaque, which will continue to raise questions about it.
The journalists at Barron’s explained the technology and its market impacts in a comprehensive article, where Citi analyst Atif Malik’s skeptical research note is cited. He says, “While DeepSeek’s achievement could be groundbreaking, we question the notion that its feats were done without the use of advanced GPUs to fine-tune it and/or build the underlying LLMs [large language models] the final model is based on.”
The article adds that DeepSeek needs to prove its scalability and show consistency in order for it to continue its rise. For today, it has created a global buzz that provides the AI and data center industries the chance to intensely scrutinize how their businesses operate. When they do that, they will likely see that new solutions are needed — which is what POET brings to the marketplace.
To Learn More About POET: Visit our Technology page.
