A promising newcomer in chip-world
Welcome to your lowkey, easy-to-follow newsletter about the fundament of (almost) everything. Here's Aafke's Saturday CHIPS!
It feels like ages ago since I last wrote this newsletter. We’re already through the first moment of 2025, and the chip world hasn’t been quiet - in that regard, nothing has changed.
DeepSeek: A disruptive force
Out of nowhere, suddenly, there was DeepSeek, founded by Chinese hedge fund manager Liang Wenfeng. It emerged as a disruptive force in the AI landscape by developing sophisticated language models at a fraction of the cost of its Western counterparts. The company's latest achievement, the R1 model launched on January 20, 2025, demonstrates capabilities comparable to industry leaders while operating on significantly less computing power. Most remarkably, DeepSeek developed this technology for approximately $6 million, starkly contrasting Western competitors like OpenAI and Google, who invested billions in their AI models.
The rise of DeepSeek has not gone unnoticed, given its ability to create a robust model on a small budget. According to AI researcher Andrej Karpathy, such a level typically requires clusters of about 16,000 GPUs, while the Chinese company used 2,000 of these chips. Here’s what we wrote about the promising newcomer:
It all sounds very promising, but its website was under development when I tried using it. I love the dolphin, though.
Global chip market
The Chinese AI startup’s chatbot shook up global chip markets. DeepSeek's R1 model surprised Silicon Valley competitors, becoming the most downloaded app on Apple's App Store. It caused Western chip companies' stock prices to plunge. ASML's stocks dropped by 9% on Monday.
On Wednesday, ASML presented its yearly and quarterly figures. The company was in good shape last year and even narrowly achieved record sales.
CEO Christophe Fouquet called the upcoming AI chatbot “good news.” One of the biggest challenges of AI right now is cost, he says. “Anything that can bring those down is good news. What you saw this week, in a way, is how to make training AI cheaper.”
The CEO says that surprises like DeepSeek are part of it, and we'll have to get used to them. He expects his company to benefit, too. “In the long run, cheaper AI will create more applications and demand. And so there are more opportunities for ASML.”
The same day ASML presented its results, the Dutch chip sector called for a €735 million joint investment. ASML, NXP, and 62 other companies and knowledge institutions want to cooperate with the government to invest an additional €735 million in the semiconductor industry over the next seven years. The goal? Strengthening the Netherlands' competitive position.
And here’s more news on chips:
MantiSpectra: Transforming spectral sensing with photonic innovation
NXP Secures €1 billion EIB loan to advance semiconductor innovation in Europe
Eindhoven-based LiveDrop announces strategic collaboration with Intel at CES
PHOTON IP raises €4.75 million for advanced low-power optical chips
If all of this is not a reason to assume a promising 2025 for chips- and to keep following my newsletter - I don't know what is. Enjoy your Saturday!
Aafke Eppinga
editor-in-chief at Innovation Origins