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On Wed, 12 Feb, 8:13 AM UTC
4 Sources
[1]
IBM CEO Says DeepSeek Moment Will Help Fuel AI Adoption
(Bloomberg) -- International Business Machines Corp. Chief Executive Officer Arvind Krishna said a reckoning over the costs of developing artificial intelligence models following the rise of Chinese startup DeepSeek will help fuel adoption of the technology. "We will find that the usage will explode as costs come down," Krishna said during an interview with Bloomberg Television at the World Government Summit in Dubai. "I think it is a validation -- we have been on the point that you do not have to spend so much money to get these models." Last month, the Chinese company DeepSeek released an AI model that it said cost significantly less to train than those from US counterparts. The launch led investors to question the level of capital expenditure that big tech firms have been making in the technology. Analysts anticipate that lower AI model costs could help software companies such as IBM offer these features more widely. For more: IBM Gives Long-Term Sales Growth Outlook That Tops Expectations The firm has worked to transform itself from a conventional computer company into one focused on high-growth software and services. It has booked about $5 billion in generative AI-related business since mid-2023, mostly in consulting.
[2]
IBM CEO Says DeepSeek Moment Will Help Fuel AI Adoption
International Business Machines Corp. Chief Executive Officer Arvind Krishna said a reckoning over the costs of developing artificial intelligence models following the rise of Chinese startup DeepSeek will help fuel adoption of the technology. "We will find that the usage will explode as costs come down," Krishna said during an interview with Bloomberg Television at the World Government Summit in Dubai. "I think it is a validation -- we have been on the point that you do not have to spend so much money to get these models."
[3]
IBM CEO Arvind Krishna: AI Adoption Will 'Explode' As Costs Drop | PYMNTS.com
IBM CEO Arvind Krishna reportedly said Tuesday (Feb. 11) that the lower costs said to have been achieved by DeepSeek will help boost demand for artificial intelligence (AI). "We will find that the usage will explode as costs come down," Krishna told Bloomberg Television. IBM has shifted its focus to high-growth software and services and has booked about $5 billion in generative AI-related business since mid-2023, mostly consulting, Bloomberg reported Tuesday. Lower AI model costs are expected to help companies like IBM offer AI features to more customers, according to the report. DeepSeek's launch of a new AI model in late January drove a plunge in tech stock prices, because the company claimed to use substantially fewer Nvidia chips to achieve comparable performance to those of its U.S. rivals. "DeepSeek challenges the narrative that innovation must come at an unsustainable cost," Gokul Naidu, a consultant for SAP, told PYMNTS in an interview posted Jan. 27. "For businesses, this means AI could soon be accessible to small and medium enterprises, not just tech giants with deep pockets." BofA Global Research said Jan. 28 that the $5.58 million cost of training a foundation model that was claimed by DeepSeek is "misleading" because the company did not include costs related to research, experiments, architectures, algorithms and data, but added that the bigger picture is that the startup introduced innovations that show less costly training is possible. "Cost is the biggest hurdle to adoption of AI applications," BofA Global Research analysts Brad Sills and Carly Liu wrote in a note published Jan. 28. "We believe advancements in cost could drive price even lower and therefore adoption higher." Anthropic CEO Dario Amodei wrote in an essay posted Jan. 29 that claims about DeepSeek's potential threat to U.S. AI leadership is "greatly overstated" and that the drop in chip maker Nvidia's stock driven by the release of DeepSeek's AI models was "baffling." Amodei wrote that a closer look shows that the DeepSeek model is close to the performance of U.S. models that are between seven and 10 months older; is "an expected point on an ongoing cost reduction curve;" and was trained by a company whose total spend as a company is not so different from U.S. AI labs.
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DeepSeek to Help Fuel AI Adoption, Says IBM CEO
IBM CEO and Chairman Arvind Krishna discusses the impact of DeepSeek throughout the tech industry, the risk of AI regulation stifling innovation, and his company's focus on quantum computing. He speaks with Bloomberg's Joumanna Bercetche on the sidelines of the Paris AI Action Summit. (Source: Bloomberg)
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IBM CEO Arvind Krishna anticipates a surge in AI adoption due to decreasing costs, citing the DeepSeek model as a catalyst. This development challenges the narrative of high-cost AI innovation and could democratize AI access for businesses of all sizes.
International Business Machines Corp. (IBM) CEO Arvind Krishna has predicted a significant increase in artificial intelligence (AI) adoption, driven by the decreasing costs of developing AI models. This forecast comes in the wake of Chinese startup DeepSeek's recent breakthrough in cost-effective AI model training 1.
In January, DeepSeek released an AI model that reportedly cost substantially less to train compared to its U.S. counterparts. This development has prompted a reevaluation of capital expenditure in the AI sector among big tech firms 2.
Krishna, speaking at the World Government Summit in Dubai, stated, "We will find that the usage will explode as costs come down. I think it is a validation -- we have been on the point that you do not have to spend so much money to get these models" 3.
The emergence of DeepSeek's cost-effective model has significant implications for the AI industry:
Democratization of AI: Lower costs could make AI technology more accessible to small and medium enterprises, not just tech giants with substantial resources 3.
Market Disruption: DeepSeek's announcement led to a plunge in tech stock prices, particularly affecting chip maker Nvidia 3.
Accelerated Innovation: The development challenges the notion that AI innovation must come at an unsustainable cost, potentially spurring further advancements in cost-reduction techniques 3.
IBM has been positioning itself to capitalize on the growing AI market:
Strategic Shift: The company has transformed from a conventional computer manufacturer to focus on high-growth software and services 1.
AI Business Growth: Since mid-2023, IBM has booked approximately $5 billion in generative AI-related business, primarily in consulting 1.
Competitive Advantage: Lower AI model costs could enable IBM to offer AI features more widely to its customers 3.
The DeepSeek development has sparked discussions within the AI community:
Cost Analysis: BofA Global Research noted that while DeepSeek's claimed training cost of $5.58 million might be "misleading" due to excluded factors, it demonstrates that less costly training is possible 3.
U.S. AI Leadership: Anthropic CEO Dario Amodei argued that claims about DeepSeek's threat to U.S. AI leadership are "greatly overstated," pointing out that DeepSeek's model performance is comparable to slightly older U.S. models 3.
Adoption Hurdles: Analysts identify cost as the primary barrier to AI application adoption, suggesting that advancements in cost reduction could significantly drive adoption rates higher 3.
As the AI landscape evolves, several key points emerge:
Regulatory Concerns: Krishna addressed the risk of AI regulation potentially stifling innovation during discussions at the Paris AI Action Summit 4.
Quantum Computing: IBM continues to focus on quantum computing as another frontier in technological advancement 4.
Global Competition: The rise of companies like DeepSeek highlights the increasing global competition in AI development and the potential for disruptive innovations from various regions.
Reference
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IBM's CEO Arvind Krishna announces new AI tools for customers, discusses the company's $150 billion US investment plan, and reveals how AI is reshaping IBM's workforce and business strategy.
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IBM introduces a suite of AI technologies at its Think 2025 conference, focusing on enterprise-ready agents, data integration tools, and AI-powered platforms to help businesses scale and integrate AI effectively.
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Robin Li, CEO of Baidu, stresses the importance of ongoing investment in AI infrastructure, despite the emergence of cost-efficient models like DeepSeek. This comes as major tech companies plan massive AI spending for 2025.
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Chinese AI startup DeepSeek has disrupted the AI industry with its cost-effective and powerful AI models, causing significant market reactions and challenging the dominance of major U.S. tech companies.
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Major tech companies like Alphabet, Microsoft, and Meta are doubling down on AI investments despite the emergence of DeepSeek's cost-effective AI model, sparking debates about the future of AI spending and development.
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