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{https://semianalysis.com/2025/01/31/deepseek-debates/}

Semianalysis publishes investigation into DeepSeek; Its analysis shows that the total server CapEx for DeepSeek is almost $1.3B and $6M figure training cost of DeepSeek V3 is wrong; Believe DeepSeek has access to around 50,000 Hopper GPUs, which is not the same as 50,000 H100

"Our analysis shows that the total server CapEx for DeepSeek is almost $1.3B, with a considerable cost of $715M associated with operating such clusters... DeepSeek’s price and efficiencies caused the frenzy this week, with the main headline being the “$6M” dollar figure training cost of DeepSeek V3. This is wrong

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Complex will be bigger than Pentagon and include bombproof bunkers for leaders, say US officials

China’s military is building a massive complex in western Beijing that US intelligence believes will serve as a wartime command centre far larger than the Pentagon, according to current and former American officials.

Satellite images obtained by the Financial Times that are being examined by US intelligence show a roughly 1,500-acre construction site 30km south-west of Beijing with deep holes that military experts assess will house large, hardened bunkers to protect Chinese military leaders during any conflict — including potentially a nuclear war.

Several current and former US officials said the intelligence community is closely monitoring the site, which would be the world’s largest military command centre — and at least 10 times the size of the Pentagon.

Based on an assessment of satellite images obtained by the FT, major construction started in mid-2024. Three people familiar with the situation said some intelligence analysts have dubbed the project “Beijing Military City”.

The construction comes as the People’s Liberation Army develops new weapons and projects ahead of the force’s centenary in 2027. US intelligence says President Xi Jinping has also ordered the PLA to have developed the capability to attack Taiwan by then.

The PLA is also rapidly expanding its nuclear weapons arsenal and working to better integrate its different branches. Military experts believe the PLA’s lack of integration is among its biggest weaknesses compared with the US armed forces.

“If confirmed, this new advanced underground command bunker for the military leadership, including President Xi as the chairman of the Central Military Commission, signals Beijing’s intent to build not only a world-class conventional force but also an advanced nuclear warfighting capability,” said Dennis Wilder, the former head of China analysis for the CIA.

The Director of National Intelligence, which oversees the US intelligence community, did not comment on the project. The Chinese embassy in Washington said it was “not aware of the details” but stressed that China was “committed to the path of peaceful development and a defence policy that is defensive in nature”.

Renny Babiarz, a former imagery analyst at the National Geospatial-Intelligence Agency who has analysed imagery of the area, said there were at least 100 cranes working over a five square kilometre area developing underground infrastructure.

“Imagery analysis suggests the construction of several possible underground facilities linked via possible underground passageways, although additional data and information is needed to more fully assess this construction,” said Babiarz, now vice-president of analysis and operations at AllSource Analysis, a geospatial analysis service group.

The site in western Beijing was busy with construction activity earlier this month, in contrast to a dearth of development in most big real estate projects in China, which has been gripped by a property sector crisis. There were no showrooms typically associated with a commercial real estate project. Unusually for a commercial project, there are no official mentions of the construction site on the internet in Chinese.

While there was no visible military presence at the site, there were signs warning against flying drones or taking photographs. Guards at one gate abruptly said that entry was prohibited and refused to talk about the project. One supervisor leaving the construction site refused to comment on the project.

Access to the back of the project has been blocked by a checkpoint. A guard said the public could not access popular hiking and tourist areas near the site, which a local shopkeeper described as a “military area”. 

One former senior US intelligence official said that while the PLA’s current headquarters in central Beijing was fairly new it was not designed to be a secure combat command centre.

“China’s main secure command centre is in the Western Hills, north-east of the new facility, and was built decades ago at the height of the cold war,” said the former official. “The size, scale and partially buried characteristics of the new facility suggest it will replace the Western Hills complex as the primary wartime command facility.

“Chinese leaders may judge that the new facility will enable greater security against US ‘bunker buster’ munitions, and even against nuclear weapons,” the former intelligence official added. “It can also incorporate more advanced and secure communications and have room for expanding PLA capabilities and missions.”

One China researcher familiar with the images said the site had “all the hallmarks of a sensitive military facility”, including heavily reinforced concrete and deep underground tunnelling.

“Nearly 10 times bigger than the Pentagon, it’s fitting for Xi Jinping’s ambitions to surpass the US,” said the researcher. “This fortress only serves one purpose, which is to act as a doomsday bunker for China’s increasingly sophisticated and capable military.”

The construction of the site comes amid a multiyear redevelopment of Beijing’s western outskirts. But there has been speculation online in China about why houses in the Qinglonghu area were being razed.

In one post on Baidu Zhidao, the Chinese search engine’s equivalent of Quora, one user said: “Are they going to build the Chinese Pentagon in Qinglonghu?”

Two people close to Taiwan’s defence ministry also said the PLA appeared to be building a new command centre, though some experts questioned if the area was suitable for underground bunkers.

“The land area is much larger than a normal military camp and military school, so it can only be assumed that it is a site for an administrative organisation or a large training base,” said Hsu Yen-chi, a researcher at the Council on Strategic and Wargaming Studies think-tank in Taipei.

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Japanese conglomerate is in talks to spend up to $43 billion to boost the ChatGPT developer

In his newly built palace near Tokyo, lined by stone statues of Roman emperors and surrounded by an 18-hole golf course, Masayoshi Son was stewing. After declaring for years the imminent arrival of the artificial-intelligence revolution, the chief executive officer of SoftBank Group 9984 1.41%increase; green up pointing triangle had missed out on it.

“I haven’t been able to do anything,” he thought, according to a speech he gave to SoftBank investors last year. “Can I just get old like this and die?”

As it turned out, all he needed was a new golden boy. And now Son, who has a history of latching onto charismatic startup founders, has found one in Sam Altman.

In what would be the largest-ever investment in a startup, Son is preparing to put as much as $43 billion toward Altman’s OpenAI in a pair of transactions. SoftBank is in talks to invest between $15 billion and $25 billion in the ChatGPT maker as part of a blockbuster $40 billion funding round, The Wall Street Journal reported Thursday. The round would value OpenAI at up to $300 billion—nearly double its valuation in October and an undeniable sign of Son’s confidence in its prospects.

In addition, the Japanese tech and investment conglomerate has committed $18 billion toward Stargate, a venture to build cloud computing centers for OpenAI to use, according to people familiar with the matter.

For Altman, who was traveling to Tokyo on Thursday, the tie-up provides him with a deep-pocketed backer at a critical moment. His company’s relationship with Microsoft, its biggest investor to date and longtime exclusive technology partner, has been fraying over OpenAI’s contention that it wasn’t getting enough cloud computing power. And the broader AI world has been thrown on its heels by the splashy arrival of DeepSeek, a Chinese developer of cheaply made and free-to-use AI models, which has sparked skepticism about OpenAI’s strategy of spending big on proprietary technology.

Son’s commitment to OpenAI and Stargate ensures that Altman’s company will have ample cloud computing firepower in the coming years just as it has ended the exclusivity portion of its Microsoft deal. And by leading a funding round that would be the biggest in Silicon Valley history, Son is enthusiastically endorsing Altman’s plan to keep spending gobs of cash on leading-edge AI systems.

“For all of us, the AI era represents a once-in-a-generation opportunity to help build a better, safer, healthier, and more prosperous future,” Son wrote in a widely distributed email message Thursday.

At an event hosted by his company in Washington, D.C., the same day, Altman praised DeepSeek’s technology as “great work” and framed its emergence in terms of U.S. competition with China.

“This is a reminder of the level of competition and the need for democratic AI to win,” he said.

Big gambler

Son’s plans for OpenAI eclipse his biggest-ever bets. The fortunes of the debt-friendly, risk-addicted CEO have been on a roller coaster since he emerged as a force in the 1990s. An early wager on Alibaba and Jack Ma was a highlight, while a failed $16 billion investment in WeWork and its co-founder Adam Neumann, was a black eye.

Son’s past few years have been turbulent. The $130 billion he spent through SoftBank’s Vision Fund unit—theoretically aimed at AI companies—resulted in middling overall returns. Meanwhile, SoftBank didn’t invest early in any of the generative AI companies that have defined the frenzy of the past two years.

Instead, it was the $32 billion purchase in 2016 of Arm Holdings, a chip-design company, that became SoftBank’s golden goose. The company surged in the halo of the AI rush after SoftBank relisted it on the Nasdaq in 2023. Arm’s stock has tripled since then, and SoftBank’s stake is worth more than $140 billion—an asset that gives Son plenty of wiggle room financially.

Borrowing against its Arm stake would be one way for SoftBank, which had around $30 billion of cash as of September and has vowed to keep a large buffer on hand, to fund OpenAI. It could also sell some assets such as its stakes in T-Mobile and Deutsche Telekom, worth a combined $27 billion, according to FactSet.

SoftBank has held early talks with potential lenders to help fund its investments in OpenAI and Stargate, people familiar with the discussions said.

A blossoming bromance

Altman, one of the most charismatic and accomplished fundraisers in contemporary Silicon Valley, has talked to Son about investments dating back to at least 2017, when he ran the startup incubator Y Combinator. Altman met with Son in Tokyo, after which the SoftBank chief proposed investing in some of Y Combinator’s businesses. The talks fell apart because Son wanted to invest at larger amounts than Y Combinator’s leaders felt their business could handle, according to people familiar with the matter.

More recently, the two have discussed various projects SoftBank and OpenAI could work on together, including a potential effort to build AI chips across the world.

Over the course of 2024, Son became a convert to Altman’s vision. The SoftBank CEO gave a speech in October in which he gushed about OpenAI’s newest technology and said he had recently asked ChatGPT how to turn 10 million yen into 100 million yen—though he didn’t share its answer with the crowd.

That month, SoftBank put $500 million into a $6.6 billion fundraising round for OpenAI, though Son had wanted a larger stake, people familiar with the matter said. The next month, SoftBank launched a $1.5 billion tender offer to purchase existing shares from OpenAI employees.

Meanwhile, the SoftBank chief had been looking for just how he could make a giant AI bet. Months ago, he settled on the data-center push, according to a person familiar with the deliberations, reasoning that SoftBank could bring large chunks of cash and connections with top tech companies.

After Donald Trump’s election victory in November, the plans for Stargate began to coalesce as a way to marry SoftBank and OpenAI’s needs. Altman brought in Oracle Chairman Larry Ellison, whose company was already helping launch a data center in Texas for OpenAI to use with Microsoft’s blessing.

At a January press conference with Trump at the White House, Stargate’s founders said they were committing $100 billion to the venture and aiming to spend up to $500 billion over the next four years.

OpenAI and SoftBank initially committed about $18 billion each to Stargate, with much of OpenAI’s money expected to come from the SoftBank-led round, according to people familiar with the matter. Oracle and the United Arab Emirates fund MGX are expected to contribute money as well. The value of the Texas data center will also be counted in the initial $100 billion.

They still have billions more they need to secure.