DeepSeek's R1 rocks the economy

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Nvidia just made history, but not in the way it wanted. Fallout from DeepSeek’s new model sent the chip giant’s stock plummeting Monday — rippling out across the entire economy. And that was only the start of a whirlwind day.

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Today’s Insights

• Today in AI: R1’s economic impact and a cancer-focused AI startup

• Tutorial: How to build flowcharts with AI

• A flurry of new models challenge the AI giants

• Everything else you should know today

• 5 new AI tools to boost your productivity

TODAY IN AI

1. DeepSeek sends $1T shockwave through the economy: It’s finally sinking in. A week after the Chinese startup DeepSeek dropped R1, which performs as well as OpenAI’s o1 at a tiny fraction of the cost, the news hit Wall Street like a bucket of cold water. Nvidia took the biggest hit. The chip giant lost $500B — “a Stargate’s worth — in one morning,” as NYU’s Gary Marcus put it. It was the biggest drop of its kind in the entire history of the US stock market.

• What caused the meltdown? R1’s state-of-the-art performance sent the industry into an existential crisis. Investors are questioning if it’s wise to pump billions into AI companies when a rival can build something better and put it out for free with an open-source license.

• Ripple Effect: AI stocks had been on the up and up for months, but that could all change with R1 in the picture. If funding gets harder to come by, startups will have to rethink how they train their models. Throwing more compute at models may not be an economically viable path in such a scenario.

• And it’s not over yet: DeepSeek followed R1 up with yet another model on Monday. More on that below.

2. LinkedIn co-founder takes on cancer with new AI startup: Entrepreneur Reid Hoffman is teaming up with Pulitzer-winning cancer researcher Siddhartha Mukherjee on a new AI-powered drug discovery platform. While the concept of using AI as a medicine-finder isn’t new, Manas AI says it has some of the world’s best scientists on its team. With $24.6M in initial funding, the startup wants to speed up drug discovery by up to 100x, starting with breast cancer, prostate cancer, and lymphoma.

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THE AI ACADEMY

How to build flowcharts from SOPs

• Go to ChatGPT and log in with your account.

• Now insert your prompt to turn your data into a structured SOP document.

Sample: Turn this data into a structured SOP document: [insert your data]

• Next, go to Miro AI and sign up using your email.

• Click on the ‘Blank board’ option on your dashboard.

• Now click on ‘Create with AI’ and select ‘Diagrams’.

• Copy the steps from the SOP document and paste them into the text box.

• Wait for a few seconds and you’ll get your flowchart diagram ready.

• You can add brand colors, text, and export it as image to use.

FROM THE FRONTIER

Open source models threaten OpenAI’s dominance

If you’re still scratching your head over the DeepSeek news…join the club. Even top researchers and execs from the likes of Meta and OpenAI are struggling to figure out what it all means. And a new flurry of releases this week is only adding fuel to the fire.

The details:

• A week after unveiling R1, DeepSeek is back with a new family of image models called Janus-Pro that beat rivals like Stability AI’s Stable Diffusion XL and OpenAI’s DALL-E 3 while keeping a relatively small 7B-parameter footprint.

• European startup Convergence claims to have eviscerated OpenAI’s lead in the agent game with a new model called Proxy. It can navigate the web and fill out forms on its own, just like Operator. The twist is that Convergence is charging just $20/month for unlimited access, compared to OpenAI’s $200.

• China’s Moonshot AI launched Kimi k1.5, a no-cost, multimodal alternative to GPT-4o. Meanwhile, Alibaba dropped Qwen 2.5-VL, “a visual agent that can reason and interact with tools like computers and phones.”

Why it matters: We might have just reached a tipping point, with even some traditionally cautious analysts hinting at the possibility of AGI being closer than we think. The gap between closed and open-source models seems to be shrinking, too, meaning that companies like OpenAI and Alphabet are going to have a tougher time making the case for their higher-priced products. If DeepSeek and other rivals can keep up the momentum, the entire industry could get flipped on its head.

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AI & TECH NEWS

Everything else you need to know today

⚔️ TikTok Tossup: President Trump announced that Microsoft is in talks to acquire TikTok, just hours after Perplexity proposed merging with TikTok while letting the US grab a 50% stake in the platform.

👀 Sneak Peak: Some X users appeared to get early access to Grok 3, which they claimed performs better than OpenAI’s o1 on some tricky logic puzzles. The leak suggests the new model could be coming any day.

🎬 Perfect Take: Video generation platform Pika dropped Pika 2.1, a major overhaul that introduces 1080p resolution, “razor-sharp details, seamless motion, [and] lifelike human characters.”

🧠 Memory Makeover: A new Meta AI update will help the chatbot remember key details about your personality and preferences. For example, if you tell it you don’t eat meat, it’ll only suggest vegetarian recipes from then on out.

🎥 VLM and Chill: Researchers at Netflix built an experimental video model called Go-with-the-Flow that gives users a greater depth of control over how subjects move within the frame.

💰 Funding: AI-powered job recruiting platform Mercor raised at least $75M in a Series B funding round, setting its new valuation at $2B. Rad AI, which builds AI assistants for radiologists, raised $60M in a Series C. And OpenAI-backed robotics startup 1X acquired Kind Humanoid, which designs bipedal humanoid robots for homes and hospitals.

PRODUCTIVITY

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PROMPT OF THE DAY

Business Strategy

Prompt: As a skilled business strategist, draft a concise business plan for a [BUSINESS TYPE/INDUSTRY]. Include an executive summary, company description, market analysis, organizational structure, product/service details, marketing and sales strategies, funding needs, and financial projections. Summarize the business vision and mission in the executive summary. Describe the business, its value proposition, and target market.

_{Source: godofprompt}

SOCIAL SIGNALS

What’s trending on socials today

🔮 Crystal Ball: Investor Gavin Baker goes deep on what DeepSeek’s new model means for the industry — and why Grok-3 could hold some clues. Elon Musk commented “Interesting analysis. Best I’ve seen.“

😨 Fear Factor: An OpenAI researcher named Steven Adler announced that he had left the startup after becoming “pretty terrified by the pace of AI development these days.”

🪄 Marketing Magic: An SEO expert showed how he used DeepSeek’s R1 to build his own AI marketing team in less than 20 minutes.

⚔️ Intellectual Duel: Perplexity CEO Aravind Srinivas tells hedge fund mogul Bill Ackman why his fears about DeepSeek collecting American user data are misplaced, in a refreshingly honest and respectful exchange between the two.

🥎 Game On: Sam Altman admitted that DeepSeek’s new model is impressive but said that OpenAI is going to deliver much better models.

⚙️ Going Deeper: This quick video does a great job of explaining how DeepSeek R1 works.

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