Zuckerberg Convening Huge "War Rooms" to Figure Out How a Chinese Startup Is Annihilating Meta's AI

Off Guard

Meta CEO Mark Zuckerberg is scrambling after a small Chinese startup called DeepSeek turned Silicon Valley upside down with its chatbot app.

The company's latest R1 AI model can run circles around the competition from Meta, OpenAI, and Anthropic — and at a tiny fraction of the cost.

Despite some skepticism over DeepSeek's claims, the debut has led to some serious soul-searching among AI investors, with the ChatGPT competitor wiping out an estimated $1 trillion in value among other AI companies on Monday. In the most extreme example, AI chipmaker Nvidia set a new record for the biggest single-day loss of any company in history.

Among others, the app appears to have caught Meta with its pants down. In response, the company assembled several"war rooms" of engineers, The Information reports, in a desperate attempt to get ahead of the situation.

The war rooms are now hard at work, analyzing DeepSeek and looking for possible changes to make to Meta's flagship AI, Llama.

And according to the report, engineers are already afraid that the next version of the AI won't be able to compete with the Chinese AI — early indications that this week's chaos might represent the new status quo, rather than a momentary blip as investors find their new footing.

"The main frustration is, ‘Why didn’t we come up with this first?' when we have thousands of the brightest minds working on this," one Meta employee told the Financial Times.

Homework Machine

After trading resumed on Tuesday, Nvidia's share price ricocheted around a bit, but fell far short of recovery.

Meanwhile, Meta's stock has largely been unaffected and is up just over seven percent over the last five days, with investors arguing that DeepSeek could bring positive changes to the platform's AI efforts.

A notable quality that Llama and DeepSeek share is that they're both open-source, which means developers have unfettered access to the underlying code.

But Llama has historically struggled to keep up with the offerings from the likes of OpenAI and Anthropic. Now that DeepSeek has thrown the gauntlet in front of the latter two, it'll be interesting to see if Meta can pull ahead.

Over the weekend, Zuckerberg committed a whopping $60 billion to AI-related capital expenditures this year alone.

In short, the company is all in, intensifying its efforts to keep up with the soaring competition. The war rooms are looking to combine several AI models into one more fully featured system, much like DeepSeek.

But whether its efforts will pay off — lowering computing costs for Llama while simultaneously making it more useful — is anyone's guess. Remember when Zuckerberg was all in on the metaverse?

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