How DeepSeek and next-generation AI agents could erode value of language models
Large language models like those developed by Microsoft-backed firm OpenAI are set to become commoditized this year amid rapid advances toward next-generation artificial intelligence agents and more nimble, open-source rivals, according to top tech executives.
Last week, Chinese AI firm DeepSeek released R1, an open-source reasoning model that claims to rival OpenAI's o1 model on both cost and performance. Open-source refers to software whose source code is made freely available on the open web for possible modification and redistribution.
This week, growing awareness of DeepSeek's new model led to a severe slump in shares of Nvidia and other tech giants, as investors feared a possible retrenchment in spending on the powerful graphics processing units required to train and run advanced AI workloads.
Nvidia lost close to $600 billion in market capitalization on Monday — the biggest single-day drop for any company in U.S. history.
Meanwhile, executives and scientists at leading AI labs are all talking up a shift from large language models to so-called "AI agents" that can carry out actions on your behalf.
LLMs are the foundational technology behind today's generative AI apps. However, experts believe a push toward agentic AI systems — which incorporate LLM technology — this year will erode the value of these models.
LLMs are expected to become more of a commodity in the near future as the tech becomes increasingly advanced and the costs involved in training and running them continue to drop.
Thomas Wolf, co-founder and chief science officer of Hugging Face, suggested LLMs will become more integrated into intelligent systems linked to the company's own databases.
"I think people are moving from this craziness around the model,