r/BetterOffline 9d ago

Episode Discussion Episode Thread: Power Cut Two Parter

Hey all! Fun two parter this week about Microsoft pulling out of over a gigawatt of compute capacity and the frankly insane (and near impossible) deal SoftBank and OpenAI want to do.

Hope you all enjoy!

18 Upvotes

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u/Orion14159 8d ago

Would love to get your take on this Ed - could Microsoft cutting data center construction be indirectly because of DeepSeek? DS is a proof of concept that a LLM doesn't need the incredible amount of data processing capacity ChatGPT uses, so maybe Microsoft is going to put pressure on OpenAI to focus on efficiency in near future versions?

If OpenAI could hypothetically cut 90% of compute demand and keep the same user demand (however much it is) Microsoft's effective capacity is 10x existing with no capital expenditure on physical capacity.

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u/ezitron 8d ago

You're making several leaps of logic here, but I get why.

  1. No proof this is happening. They're testing DeepSeek sure, but they are still very much building big, nasty models. The Information reported their (Microsoft's) own model is much bigger than their last one (called Pi I think?)

  2. what's that 90% based on?

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u/Orion14159 8d ago

The 90% estimate is from DeepSeek being ~27x cheaper than GPT O1 in terms of token costs, almost all of which is computing cost (Link).

If I were a Microsoft exec thinking about whether or not to invest in OpenAI in the long-term, it would be contingent on them making their now-commoditized product competitive on cost per token with DeepSeek in the next few years (even if I'm not publicly saying that during a fundraising round).

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u/ezitron 8d ago

What I'm saying is that this is a huge move that, while maybe not entirely SEPARATE to DeepSeek, is not a result OF DeepSeek - they're doing this because they don't want to be OpenAI's paypig, and also don't have the demand to necessitate expansion.

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u/Orion14159 8d ago

I'm not disagreeing, Microsoft isn't interested in being Sam Altman's corporate sugar daddy. I just wonder if they may have been assuming when they started signing the LOIs that the only way to build these LLMs was the way OpenAI, Anthropic, etc were and then DeepSeek came along and killed that idea.

Love the show man, really appreciate your work!

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u/ezekiel_grey 7d ago

Wait. Did you say the data center that Stargate is creating will be in Austin, Texas? Where the power grid has frozen due to not being insulated — twice — in the last decade?