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While Deep Seek R1 presents a remarkable evolution in AI accessibility, several challenges persist. Smaller models often lack the depth and breadth of knowledge found in larger counterparts, making them susceptible to producing inaccurate information—commonly referred to as "hallucinations." In addition, they rely on the quality of larger models for training data, meaning any biases present can carry over into the new models.

The Future of AI Competition

Deep Seek R1’s efficiency and cost-effectiveness could disrupt the American AI industry by undermining the competitive edge of proprietary models. The ability of developers to utilize open-source models restricts the monopoly established firms have enjoyed over the AI landscape, potentially impacting their revenue streams.