Deep Week for DeepSeek
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love. Guaranteed to fit every time. eBay. Things people love. This is the Daily Tech News for Friday, January 31st, 2025. We tell you what you need to know, follow up on some context in those stories, and try to help each other understand. Today's CTA head, Gary Shapiro, talks to us about how and why they put on CES every year and your emails. I'm Tom Merritt. I'm Jen Cutter. Let's start with what you need to know with the big story.

It's time for your end of week deep seek news roundup. Jen, it really has been an entirely deep seek week, hasn't it? It is everywhere all of the time.

All right. Well, let's start with Bloomberg. Bloomberg has sources that say the U.S. government, including the FBI, is investigating whether DeepSeek bought NVIDIA chips from third parties in Singapore in order to circumvent U.S. trade restrictions on selling powerful chips to Chinese companies. So here's the background on that.

This isn't the entire thing. It's actually quite complex. But the parts that you need to know for this story, in 2022, the U.S. government restricted NVIDIA from selling its hopper chips, the H100 chips, to Chinese companies. So NVIDIA created a new version of the hopper chip, the H800, to Chinese companies.

to sell to Chinese companies it was designed to be as powerful as it could be without violating the new restrictions well in October 2023 the US decided to write new rules that made it

restricted to sell the H800s to Chinese companies. So NVIDIA went back to the drawing board again and created the H20, which is what it now sells to Chinese companies. And, you know, a side note, the U.S. has been considering rewriting those restrictions again to stop the sale of the H20 to Chinese companies. I know it's a lot. The important part,

is that in DeepSeek's paper about the V3 model that it released last month, so the paper was released last month, V3 model was released in December, it described using 2048 H800 chips to train it. Now, this has led a lot of people to jump to the conclusion that DeepSeek somehow obtained H800 chips despite restrictions.

An excellent analysis of the entire DeepSeek issue is over on SemiAnalysis.com and it sheds some light specifically on the export stuff here. DeepSeek was spun out in May 2023 from a company called HighFlyer, which was using AI for financial trading products. And they realized they had created some really good tools, so they wanted to spin out a company to pursue that.

High Flyer had been buying GPUs for a long time. They had 10,000 A100 GPUs in 2021 before any of these restrictions went into place.

In addition, SemiAnalysis sees evidence that DeepSeek has access to around 50,000 hopper GPUs. Now, this has led a lot of people to jump to the conclusion that they're H100s because they're hoppers. But technically, the H800 and even this new H20 are hopper GPUs. The H800 is almost identical to the H100, it just has lower network bandwidth.

However, if you're a company like DeepSeek that's developed an efficient algorithm like the V3 algorithm or the R1 algorithm, you might be able to take advantage of the H800 just as much as you would if you had the H100. Semi-analysis thinks that DeepSeek has access to 10,000 H800s. It also thinks that somehow they may have access to 10,000 H100s and there are orders out for a lot of H20s.

If they got H100s, there could be a question of how they did it legitimately, but it's not the only GPUs they have. So it's not like, well, if they didn't have the H100s, they wouldn't have been able to do this. And we don't know for sure if they have them or not. The fact that they were able to do what they did is not evidence that they have illegally obtained chips. It's kind of, you know, jury's out on that.

There's also some debate about the pre-training cost. DeepSeek put $6 million as the training cost for V3. That's a very low number. Semi-Analysis points out that that is just the cost of the final training run. And DeepSeek didn't say any different in its paper.

But that's like, you know, saying it cost me $5 to run my car when you're not talking about the purchase price or, you know, the maintenance or any aftermarket stuff. You're just talking about the gas you put in it. When you count research and development and test runs, Semi Analysis estimates it probably cost around $500 million to put together just V3. We're not even talking about the new R1 that came out last week.

Alright, that's the chip story. Here's a few others in the roundup. Semi Analysis also notes that Google's Gemini Flash 2.0 thinking model, which was released last month, is even cheaper to run than DeepSeq's R1 and has a longer context length. It beats R1 on three benchmarks that Google released. Now that's cherry picking, I know, but they're valid benchmarks, so it's at least competitive.

And Semi Analysis wrote, "We think Google's model is robust, standing up to R1 in many ways while receiving none of the hype." They even threw a little shade on Google's marketing efforts for the reason that there isn't more hype around the Flash 2.0 thinking model. And by the way,

The news today is that Google has made Gemini 2.0 Flash available to all users in the Gemini app. It also updated its flagship model from Gemini 1.5 Pro to Gemini 2.0 Pro Experimental that is available for all Gemini Advanced users.

All right. Couple other things that are related to all of this that are worth knowing. Hugging Face has released something they're calling Open R1. It's a fully open source reproduction of DeepSeek R1, which, by the way, has a lot of open source elements itself. And the goal Hugging Face wants to achieve is.

is to reproduce the parts of deep seeks model that weren't detailed openly. So specifically, how did they collect the data? How did they train the model and what scaling laws did they use? So if you're interested in that, you can go follow that over at hugging face. And if you just want to use open AI's version of all of this, the Oh one reasoning model instead of deep seek, cause you're like, I don't know. I don't know if I want to give them a data to deep seek or not. Uh,

But you don't want to pay the $200 a month for OpenAI Pro. Well, just be a copilot user. Apparently, Microsoft said it will give all copilot users free access to Think Deeper, which uses OpenAI's O1 reasoning models.

models. Windows users can access it in the Copilot app or go to copilot.microsoft.com because it's just a progressive web app. Just remember to toggle on the Think Deeper switch. And of course, your computer has to be able to support Copilot for that to work, but otherwise you can do it for free. Jen, I know there's like so much even today at the end of this week. Are you going to play around with any of this stuff? It's just so much to take in.

I can't even think of what I would ask each one of these things to, like, I know people are playing with like the history side of things and trying to get it to say things that maybe they're not supposed to say, but there's only so much work I need to do in a day. And I can't imagine needing every single one of these models. Yeah. If you, if you find it's really good at something, having a free version, whether it's Think Deeper or Deep Seek R1 or something else is nice to have.

There are concerns about like, if you're using it for work, do you want that data going into servers in China? DeepSeek has not got any direct connections to the government there, but everything on a server in China is, you know, potentially available to the government. So that's something to think about.

But some people don't trust Microsoft either. So I think they're possibly more trustworthy because of some of the things they've done to keep data in Europe from being brought back to the United States and stuff. But, you know, mileage may vary on that. DTNS is made possible by you, the listener. Thanks to Mike Akins, Norm Fazekas, Chris Allen, and James Collins.

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Ryan Reynolds here from Mint Mobile with a message for everyone paying big wireless way too much. Please, for the love of everything good in this world, stop. With Mint, you can get premium wireless for just $15 a month. Of course, if you enjoy overpaying, no judgments, but that's weird. Okay, one judgment.

Anyway, give it a try at mintmobile.com slash switch. Upfront payment of $45 for three-month plan, equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. Hey guys, have you heard of Goldbelly? Oh my God, it's the coolest thing ever. It's this amazing site where they ship the most iconic, famous foods from restaurants across the country, anywhere nationwide. I've never found a more perfect Valentine's gift.

They ship Chicago deep dish pizza, New York bagels, Maine lobster rolls, and even Ina Garten's famous cakes. Seriously. So if you're looking for a Valentine's Day gift for the food lover in your life, head to goldbelly.com and get 20% off your first order with promo code gift. There's more we need to know today. Let's get right to the briefs. Counterpoint Research estimates India's smartphone market rose 9% in 2024 to set a new record high for wholesale revenue.

Ah.

That is good news for Apple, which saw its Chinese sales fall 11%, the largest drop for it in the market since Q1. It will need India to keep growing to make up some of that gap. So good to see it. I mean, it's not there. India is not going to make up for it yet, but that's the kind of trend they want to see.

Apple overall reported record revenue worldwide led by Mac sales. Mac sales were up 15%. iPad sales up 15%. iPhone sales essentially flat up 1%. And that's in large part because of that big dip over in China.

Tim Cook said the company saw better sales of the iPhone 16 in markets where Apple Intelligence had rolled out. And he was specifically like, if we could roll out Apple Intelligence in China, if we could figure out how to do that, it might help there too. Apple continues its pivot to become a services-based company as well. Services revenue rose 14%, topping more than 1 billion subscribers across its services. This is what makes me laugh when people talk about Apple TV Plus services.

being a failure. It's like, yeah, it's just one part of 1 billion subscribers. The services division of Apple includes the revenue they make from the app store, but specifically for services and for subscriptions, I mean, iCloud, Apple Music, Apple TV+, Apple Fitness, Apple Arcade, all that stuff.

You might be able to get some money from Apple if you owned an Apple Watch Series 1, 2, or 3, bought in the U.S. between April 24, 2015 and February 6, 2024, and reported a swelling battery. Apple has settled a class action lawsuit, and each member of the class stands to get between $30 and $50.

Apple did not admit fault as part of the settlement. There's a lot of very excited people, but how many people actually had the swelling battery and reported it? Because you had to report it already to be able to get the money. Yeah, reporting is the tricking part. Yeah, yeah.

The contents of Meta's all hands meeting have leaked out and multiple outlets led by Business Insider have reported some notable quotes from CEO Mark Zuckerberg. Amongst some of the ones getting the most attention, Zuckerberg said that the company was slow to respond to TikTok because, quote, we didn't think TikTok was social.

Okay. Yeah, it's fair to admit. Also, he said the company has sold more than 1 million Ray-Ban smart glasses in 2024. That's the first sales figures for the glasses. Specifically, they didn't mention them in their earnings report earlier this week. He also said that employees should buckle up for an intense year. That's getting a lot of attention because people love being threatened when they're an employee. And my personal favorite thing he said was he added, everything I say leaks.

Indeed. Indeed, Mr. CEO. It's almost like you knew what you were saying was going to leak while you were saying it.

Intel beat analyst expectations with its earning call, but that's kind of all of the good news. Q4 revenue was down 7%, data center and AI revenue was down 3%, and the company forecasted that revenue would be down in Q1 because of weak demand and market competition. But not to worry, a new CEO is on the way, though Intel did not say when, adding, these things take time. Ha ha ha.

Oh, poor. I almost feel bad for Intel right now. Like they just can't catch a break. Mm-hmm.

WhatsApp told TechCrunch it disrupted a campaign to access chats from around 90 targeted users, including journalists. WhatsApp believes the intrusion was linked to Paragon, a spyware company from Israel that is owned by U.S. private equity company AE Industrial Partners. The attack used compromised PDFs that were sent to targets to try to exploit a weakness in WhatsApp, which has since been patched, but unnoticed.

Kind of the first time Paragon has been called out publicly by a big company like this. Yeah, by name. So you definitely need to have proof before you make a statement like that. The Verge notes the minimal phone, which was announced last year, is now shipping.

The Android 14 minimal phone has an e-ink screen and physical QWERTY keyboard. While not every app will run well on these slow, refreshing screens, the idea is it will be perfect for people who want fewer distractions from their phones. It was supposed to begin shipping in August, and some are worried it may not ship at all. But it is shipping now, in the order in which people ordered it, and the company is taking new orders for delivery, starting in March at $399.

I know everybody talks about wanting distraction-free phone experiences, but, and this is really cool technology because it's got the physical QWERTY keyboard and the E Ink screen is so cool. But I wonder how many people are going to keep using this a year later after they get it. Yeah, well, it's like the same way some writers will write on old laptops that do nothing but write. And also E Ink is just cool. And I cannot wait to see how the keyboard holds up in practice. Definitely would want to play with one of these for sure.

Apple has asked the court that is deciding the remedy to Google's antitrust violations, that's the antitrust case over general search in the US, to let it take part in the hearings set to begin in April.

The court denied the request, saying it had not been filed in a timely manner, but Apple could file post-hearing briefs to express its views before the judge made the final decision. Apple, however, is appealing that decision and has asked Judge Mehta to stay the hearings until the appeal is heard.

Apple gets billions of dollars a year from Google for its search placement. And those deals might be prohibited by the judge as part of his remedies. So that's why they suddenly like, wait, we have something to say about this. NVIDIA's RTX 5090 is already out of stock with some outlets saying it will be April or May before it will be able to fulfill new orders. Big retailers reported anywhere from one to 10 cards being shipped to them, which of course sold quickly.

Nvidia warned about shortages of stock before the on-sale date, but has not commented since. If you do get a hold of any of the 50 series cards from Nvidia, you could take advantage of the updated DLSS 4 support, including a new performance boost that can generate up to 3 additional frames.

And Smooth Motion now works on games whether or not they have built-in support. Yeah, these are nice updates to DLSS for the 12 people that have them. I mean, it's not just the 5090, it's the 5082. So there's more people that have it. But did you see all those lines of people camping out? And then some of the people who camped out to get a 5090 couldn't get one because the store is like, yeah, we only got 10.

Never mind 10. Who got one? How bad do you feel for the guy who's second in line and gets nothing? Yeah, yeah. And some of the big online retailers even said they didn't get any sent to them yet. So I'm very, very curious for NVIDIA's explanation on why the supply is so constricted for the 5090 in particular.

Finally here, Google is testing something called Ask Me, which can call businesses for you and ask them about availability and pricing. But it's a test, so it's very limited. First of all, you have to opt into the Search Labs situation on desktop or mobile to try it out. That's not the hard part, though. The hard part is you either need your car fixed or your nails done because the service is limited to nail salons and auto shops for the moment.

So if you're in the market for one or both of those, you can have Ask Me do the call for you. Basically, you tell it like, you know, I need a nail appointment at 1030. I want some nail art done. And then it'll go and schedule that for you and ask about it for you. Those are the essentials for today. Let's dive a little deeper in the ongoing stories and follow up. Ever wonder how CES happens or how it stays so big? We found just the person to ask about it.

I'm talking with Gary Shapiro, CEO of the Consumer Technology Association. Thanks for talking with me today. Well, thanks for having me on this great podcast. Thank you. So CES just wrapped up. I know it's the jewel of the year for the CTA, if you will. How early do you start for next year? Are you already working on 2026?

Totally. In fact, I could tell you the dates of our show going through the late 2030s if you want. But because we use almost every major facility in Las Vegas, we have to plan literally years ahead of time, as do a lot of groups. Actually, for the 2025 show...

In 2023, we're drawing the floor plan. We talked to the biggest companies and see what they want. The ones with the most seniority, they get to choose first. And then we designed a floor plan. And then during the four days of the show, believe it or not, companies are choosing their space for the next year.

So the 2025 CES during it, we've already sold a lot of the space for the 26 CES and companies are pretty excited about their experience. They're in the moment. It saves us honestly several months of playing domino effect. And it's something that most of the major trade shows have actually followed that format.

You know, that's a good point. In a world where companies tend to do a lot of their own events these days, CES has stood out, I think, as being a place where companies are still coming and treating it like a place to have a big platform. And video was a great example this year. What is the secret to keeping companies interested in coming back?

Well, we've been very lucky, to be honest with you. I don't credit my brilliance to anything. It's a combination of luck, hard work, opportunity. We have certain things that we follow. We have a culture that values honesty and candor. We highly value and produce an actual independent audit of the attendance and the exhibits at CES to make sure when we give numbers to media like you, they're independently verified. We're one of the few U.S. shows to do it. It's more common in Europe.

We also want to, in a sense, the exhibitors and the industry own us. We're a nonprofit organization. And as such, we feel we have an obligation. And there's a culture there also focusing that the big companies are obviously part of what we do, but so are the small companies. And you can see our leadership is balanced

In fact, our chairman this year is from Amazon, but our last two chair people were from really relatively small organizations. The woman that's Dina Gazarian had a three-person organization. We have a culture of favoring small companies and the big companies respect that. That's why we have Eureka Park at CES. And it's a culture. And we also try to focus on new. We view ourselves as a platform. Mm-hmm.

The platform is designed to present all sorts of new things to our attendees and also different sides of an issue. We clearly take positions in Washington and around the world and in state legislatures. We have a very clear point of view, but we invite our opponents to speak as well because we feel we substantively will beat them. And we've been very fortunate, especially in the United States, of doing that. And our innovation culture in the U.S. has stemmed in large part from our ability to present a substantive case favoring innovation.

I know a lot of folks in our audience do have small startups. They have small businesses. If they want to get involved with the CTA, what resources are available for them and how do they get involved in the Consumer Electronics Show itself?

But sure, for CES, it's really easy. You just say you're interested, go to our website, ces.tech. And we have a special place for startups called Eureka Park. And it's actually a subsidized area of the show. You just can show up with your product or your idea and a few talking points. And we supply everything else from the booth to the chair to the table. And it's a few thousand dollars. And it's the way some of our most active volunteers have started and become much bigger companies.

We also, we have at the Consumer Technology Association, which owns CES, we have a special portion of the organization for smaller companies, for entrepreneurs and innovators, and they love it. They get together. They not only get deep friendships when they get involved, but they have access to all sorts of materials from

tremendous amount of market research that we do where we ask consumers questions about what they like and what they want to having an influence in public policy. We've had many of our small business members come and testify before Congress or government agencies because we have very clear aligned positions.

And that has allowed companies to get involved. One of the big ones that we're pretty happy that there's a change now is we want big companies to be allowed to buy small companies because most small companies are financed and get investment because people expect an exit of some type. And big companies buying those small companies is something that's...

Our small companies are real passionate that they have that ability. Many of them have sold their companies and started numerous startups and they just keep going that way because they love doing startups. Others just stick with the company and become part of a bigger company. Of course, you know, a few go public like NVIDIA certainly did and did very well. That's probably the best example of a company that was very small when they first, I met Jensen when he first came to Washington, D.C. his very first time. He spoke to our staff. I wish I paid more attention to what he was saying, actually. Well,

It's hard when you got that many people. Yeah. You know, you talked about the fact that CES is a platform. The CTA tries to provide a platform for the new for the new technologies. AI was obviously a big star of the show this year. What do you see as some of the faster rising technologies and things that we can look forward to at future CESs?

Well, artificial intelligence is obviously going to dominate for a while. With the return of the Obama-Trump focus on self-driving cars, vehicles, and a focus on cutting health care costs and empowering the disabled and the elderly, we expect a return to a focus that's been absent for four years. We kind of marched in pace on self-driving and all the money was thrown at

electric vehicles. And now the new secretary, well, who soon be the new secretary of transportation should be approved by the time, by the Senate, by the time this goes live, is very much a proponent of self-driving cars. So we expect a major change there. We also expect a lot focusing on robotics. That's clearly a growing area, especially as they become more humanoid looking and lifelike. I mean, there's so many variations on a theme. That is the future we expect.

as well as obviously automation in terms of businesses, restaurants, things like that, because it's also a business to business event in very large measure. And also, as we announced, there's two focuses at this CES, which we're just beginning on. One was quantum computing. We had a conference on that. We just announced that we're invested in the World Conference

Congress on quantum, and it's something that we're now part of and we're joined with them. And that's the future and the long-term future. The other is maybe less exciting, but it's real challenge now for our society and for the first time, I feel, for our industry, and that is where do we get all electricity from? Mm-hmm.

Interestingly enough, President Trump's come out very much against wind, but he seems to be favoring everything else. We'll see what happens with nuclear. We'll see what happens with other things. The California fires certainly have raised one more time the focus on how utilities do things, how they put out wires, how they create the opportunity for fires, things like that. So there's a lot of energy, if I will, focused on the energy issue, and we'll see all sorts of ways. It's also energy creation issues.

Uh, energy production, cutting down use of energy. Uh, the consumer technology industry produces a huge number of extremely energy efficient products. We're not, we're the only industry I think you can point to that say, well, the prices have come down in many categories. The products have gotten better. Any energy use is actually less.

With AI and with quantum, we definitely need more energy. I mean, you could argue maybe they're using less energy because they're solving problems quicker, but then now they're just also tackling tougher problems. So there's a lot there. The CES certainly has a huge number of areas, and we've seen a lot of new areas in agriculture, food production, as well as cosmetics, pet tech, and others that have just seemed to keep growing. And obviously health tech, because health is such an important part of our lives, and it's also an important part of what we spend

Um, um, as a society and there's technologies filling in gaps where there's just not enough trained humans to go around. Big thanks to Gary Shapiro, uh, for taking the time to talk to us. He's a hugely busy man. Uh, and we got to talk to him for quite a bit of time. In fact, we're going to be back with him on Monday to talk about his book, pivot or die. And more broadly ask him what he thinks makes companies innovative. So check that out on Monday show.

What do you want to hear us talk about on the show? One way to let us know is in our subreddit. Submit stories and vote on them at reddit.com slash r slash daily tech news show. Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistants assistants switch you to Mint Mobile today. I'm

I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of $45 for three-month plan equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. Enjoy a brilliant sleep experience with Soundcore from Anchor. Stressed out by your partner's snoring? Having trouble falling asleep? Waking up too easily?

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We end every episode of DTNS with some shared wisdom. Today we got two for you, Andrew and RW helping us understand stuff. First of all, RW in response to Vodafone's rural test of satellite video phone calls in Wales. RW said, Jason and Shannon, professional, compelling, and fun. Great new team. But to be fair, mobile coverage in Wales has always been pretty rubbish.

I'm in Pontebrith in the South Wales Valley. Big Jim, top man. So, yeah, if you start making some video calls over satellites, RW, please let us know. And we also got a question from Andrew who said, I'd be interested to hear you discuss this at the end of the show. The TikTok ban. I don't want to cover old ground here, but my question is, why doesn't such a policy apply to WeChat?

Surely that would have far more personal info about people via chats rather than TikTok. WeChat has been around for 15 or so years and no one seems to care. Thoughts? Jen, what do you think? Why the selective picking on TikTok versus other Chinese apps like WeChat? Because one has mainstream name recognition. Bingo. Got it in one, I think. Yeah, that's where I'm at too.

So yeah, it's the popularity of it. WeChat is very popular amongst the Chinese diaspora. So people who are visiting the United States will use WeChat. People who are communicating with their family members back in China will use WeChat. But you're not sending as much data as TikTok is. And also, WeChat doesn't really threaten any U.S. company's market share, does it?

One of the first Chinese companies, or I should say Chinese app styles that I thought would come under regulatory scrutiny was actually going to be a lot of the early photo apps. Before phones had it built in to take out the red in your face and stuff, people were downloading these random Chinese apps that only worked online, that set your face to servers and stuff. That's never really gotten mainstream coverage.

Yeah. And built up large databases for visual recognition training, I'm sure. You know, like what else would they do? Maybe more nefarious stuff, maybe not. But just that, I think, is something top of mind. The other side of this is that the Foreign Adversary Act that is targeting TikTok by name in the act, which is sort of unusual, does allow for the president to identify other apps.

There are some criteria it has to meet, but they're kind of fuzzy. So you could sort of gin up an argument for any app you didn't like, as long as it was in China, North Korea, Iran, or Russia. So any Chinese-based app, you could probably make a case for and put it out there, and then Congress has to look at it. But I don't think Congress has to approve it, if I remember the law right. So this could happen to more apps in the future. However...

Andrew, to your point, it looks like everybody's scrambling to figure out how to make it not apply to TikTok. So I don't know if they'll be executing this act again or not, given sort of the blowback to it almost being enforced this time.

And just a reminder, everybody, that law is still in effect. The reason you can't get TikTok from an app store in the United States is because the law says you can't. TikTok is operating only for people who already have the app. There's some questions on whether providing the internet services that allow it to continue to operate is in violation of the law. But all the executive order did was said, we won't enforce the law. We won't go after you for 75 days.

while we figure something out. If everything gets settled, I doubt anybody's going to take them to court, but theoretically they could. They could go after Oracle and try to prove that they violated this law, even if everything's settled and TikTok counts as divested eventually. So it's a really weird situation. Well, Jen Cutter, thank you so much for being here today. My pleasure. And I hope that people who are testing out all this AI stuff, let us know how it goes.

Feedback at DailyTechNewsShow.com. Big thanks to Gary Shapiro as well, again. Also, thanks to Andrew and RW all for contributing to today's show. Thank you for being along for Daily Tech News Show. The show is made possible by our patrons on Patreon.com slash DTNS. And don't forget, there is also DTNS Live. You can get it on YouTube, Twitch, and in your favorite podcast app. Find out details at DailyTechNewsShow.com. Talk to you on Monday, everybody.

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