DeepSeek Splash

I have a confession: for reasons, I tend to keep my techno-enthusiasm under wraps. All tech bubbles eventually pop, often leaving scorched earth. Two tech utopia startups I helped found—SkyLights Allomind (VR) and Securescore (blockchain)—ended up in the dead pool when their bubbles burst. I’ve since learned to focus on the business problem and opportunity at hand. Grow users, solve problems, get paid.

Secured Carbon automates financial due diligence and compliance. We’re poised at the intersection of asset-backed finance, regulatory compliance, and investor due diligence—collectively, a $50 billion market opportunity. I’m excited to disrupt this space with diligence and sweat.

Something Happened

But last Tuesday, something happened that changes everything. An obscure Chinese startup released R1, an open-source AI model they claim rivals OpenAI’s most costly “reasoning” model, GPT-o1. DeepSeek also says they trained R1 at a fraction of GPT-o1’s budget. Less than a week later, on Monday, DeepSeek released Janus Pro, a “vision” model that claims to outperform DALL-E 3 and Stable Diffusion.

Cheap to develop, free to use, and able to run on consumer laptops and desktops, these models threaten the monopoly—and profitability—of Gen AI giants like OpenAI and Nvidia. In response, the US stock market dropped by $1 trillion in total market capitalization.

Industry Back(sp)lash?

Microsoft reacted by incorporating R1 into its Azure AI Foundry and GitHub platforms, reducing reliance on existing partners. (Think IBM’s response to Linux.) Perplexity AI followed suit, offering R1 as an alternative to models like OpenAI’s GPT-o1 and Anthropic’s Claude-3.5. “It thinks out loud like an intelligent person,” said Perplexity CEO Aravind Srinivas.

Taming of the Shrewd

The speed with which Microsoft and Perplexity AI deployed DeepSeek models matches my own experience: it’s incredibly easy to download and run these distilled versions on regular laptops and desktops—almost “App Store easy.”

After testing multiple versions of R1 and Janus Pro this week, I can confirm they’re game-changers. R1’s reasoning is refreshingly open about “knowing nothing” at the start of each chat, gradually composing its expertise in real time as it works through a problem. GPT-o1’s reasoning, in comparison, feels like a know-it-all consultant spouting jargon. Endearingly (or creepily?), the smaller “distilled” versions of R1 often slip into an “English as a Second Language” syntax, reminiscent of Eliza Doolittle.

So What Now?

We rely heavily on GPT-o1, Claude-3.5, and Perplexity AI across all aspects of our business. But the cost per inference for these models is too high for large-scale production.

While I’m not about to replace our setup with DeepSeek’s models, I’ve started incorporating them into my workflows. And I’m 100% certain Secured Carbon will soon host its own instances of these open-source models. Just yesterday, researchers at my alma mater, UC Berkeley, announced they’d replicated parts of DeepSeek R1 for only $30. The Cambrian explosion of open-source AI began this week—and it changes everything.

So Now This

I'm starting to work through how to reposition Secured Carbon in the face of this C-change. Over the weekend, while testing R1, I discussed these developments with my teams, my network, GPT-o1 and Claude 3.5. In the end we worked together to draft a new go-to-market proposition that brings our AI workflows out of the closet and puts them at the center of our story.

If you are curious what a few nights of AI-supported strategy, market research, content development and web development can produce, I share with you the fruits of our labor: a early (non-functioning) mockup of our new marketing website. Whether you are an AI skeptic, moderate, or optimist, I'm curious to hear what you think. Drop me a line.

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Tac Leung
CEO
Secured Carbon

​Secured Carbon is a streamlined risk management platform that unlocks clean energy tax credits to save the planet. Our software harnesses the power of the tax code to enable standardized and scaled investment in the clean energy transition.

The company is founded by entrepreneurs hailing from the world’s most renowned financial institutions including Standard Chartered Bank, Lloyd’s of London, Citi, Merill Lynch, Bank of America and Wells Fargo.

633 Main Street, Half Moon Bay, CA 94109
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