The Cognitive Revolution · 2025-01-25 · 106 min

Emergency Pod: Reinforcement Learning Works! Reflecting on Chinese Models DeepSeek-R1 and Kimi k1.5

Erik TorenbergNathan Labenz

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TL;DR

DeepSeek-R1-Zero shows that a powerful base model can acquire o1-level reasoning through an unexpectedly simple reinforcement-learning loop. R1-Zero received no human demonstrations, preference data, or process rewards; it was given problems and rewarded for correct answers. No Monte Carlo tree search or structured search was described, and no value function is explicitly described for this setup. Labenz’s core reaction is that “it all just works,” with reflection, backtracking, and alternative exploration emerging on their own.
China’s frontier-model gap with the West has narrowed enough to undermine strategies premised on a durable Western lead. DeepSeek-V3 reportedly cost roughly $6 million to train yet reached GPT-4o and Claude Sonnet territory; its 671-billion-parameter mixture-of-experts architecture activates about 37 billion parameters per token. Labenz sees that as both a “we are here and cannot be ignored” statement and evidence that chip restrictions have not kept leading Chinese labs off the shared frontier.
The reasoning curve still appeared steep after roughly 8,000 training steps, with average thinking length rising from about 500 to 10,000 tokens. On the cited AIME results, R1-Zero rose from roughly 15% to above 70% in a single attempt, while a 16-generation consensus rose from about 25% to roughly 85%. The x-axis was not logarithmic and the curve had not flattened, supporting the claim that models may keep improving simply by “thinking” longer.
Open weights turn frontier reasoning from a premium cloud feature into a capability that can now be run locally at some sizes. Distilled models reached much smaller sizes; the cited Llama 70B distillation scored about 65% on GPQA Diamond, versus roughly 50% for GPT-4o and 75% for o1. Labenz says the availability of PhD-level reasoning on a laptop is “the new normal,” while the transcript more specifically identifies the smallest distilled models as laptop-runnable.
The immediate commercial pressure is on reasoning-model pricing, latency, and closed-model differentiation. Hyperbolic was charging about $2 per million R1 tokens against $60 per million o1 output tokens, while R1 exposed its thinking stream and responded faster. Labenz still preferred o1 for many multi-turn and general-assistant tasks, but expected R1 to be compelling for coding and saw an o1 price cut as plausible.
The new models are powerful precisely where interpretability becomes weakest. R1-Zero’s reasoning can switch languages and become difficult for humans to parse; DeepSeek’s R1 training applies harmlessness rewards to the entire chain of thought, raising the possibility that optimization teaches models to conceal disfavored reasoning. Janus, a model observer using the handle @repligate, gave an explicitly vibe-based impression that R1’s chains were “substantially steganographic”—not evidence, but a concrete risk to investigate.
Labenz now regards weakly superhuman AI within one to three years as credible, while remaining unsure what truly godlike intelligence would mean. Reasoning is transferring beyond math and coding, specialized models already operate in scientific modalities humans cannot intuit directly, and memory work such as Mamba and Google’s Titans paper is adding another important capability. His updated call is categorical at the directional level: “I think the singularity is in fact near.”

Digest · the substance, structured for research

1. DeepSeek joined the frontier as the West’s presumed lead contracted

Nathan Labenz opens with the striking timing: DeepSeek-R1 and Moonshot AI’s Kimi reasoning-model paper both appeared on Trump’s inauguration day. He cannot tell whether that was coordinated, competitive preemption, or coincidence—“it’s hard to believe that it was an accident”—and refuses to infer Chinese motives from launch theater alone.
The firmer conclusion is technical: DeepSeek has joined the top tier of global developers, while Moonshot might have done so but cannot be judged confidently from benchmarks before Kimi is usable. The episode’s through-line is shrinking gaps—between closed and open models, and especially between Western and Chinese labs.
Labenz rejects Scale AI CEO Alex Wang’s full-page “AI War” framing as “wildly irresponsible.” His pushback is strategic rather than dovish: no such war currently exists, one would be bad for everyone, and a policy dependent on an “unassailable AI lead” looks fragile when Chinese cycle times have compressed to months.

2. A roughly $6 million base model changed the compute-policy arithmetic

DeepSeek-V3 is the base underneath R1 and, in Labenz’s account, reached GPT-4o and Claude Sonnet territory with a single-digit-million-dollar training-compute budget—popularly summarized as the “$6 million model.” Efficiency came from data curation, algorithmic optimization, and closely matching network design to available hardware.
Architecturally, V3 has 671 billion parameters but uses a mixture-of-experts design with roughly 37 billion active at a time. That improves learning and knowledge absorption without activating the entire network per token, though hundreds of gigabytes of weights still make the full model impractical for an ordinary laptop or private home setup.
The investor-relevant mechanism is shared infrastructure: such a model can run efficiently behind an API because GPUs and throughput are pooled, but poorly as a personal appliance. Even so, $6 million is small enough that domestic production or smuggling could plausibly supply leading Chinese groups despite restrictions—making total compute denial look unrealistic.

3. R1-Zero learned reasoning from correctness alone

R1-Zero is the research result Labenz considers potentially more important than the polished R1 product. Its analogy is AlphaZero: start with a capable base model, supply no human demonstrations or preference labels, and use pure reinforcement learning to amplify behaviors that achieve objectively verifiable outcomes.
The reward design is almost austere. A correctness reward marks a math answer or code result right or wrong, while a separate format reward enforces a thinking block followed by a final answer. DeepSeek used group relative policy optimization: sample multiple responses—Labenz suggests 16 as a common number—compare each with the group average, and strengthen the relatively successful attempts.
Code offers a richer gradient than an all-or-nothing math answer because eight unit tests can produce partial progress such as two, seven, or eight passes. Yet Labenz’s reading of the paper is that the central discovery survives the nuance: “Most of the improvement is definitely coming from the accuracy reward.”
The necessary precondition may be model strength. A weak model that never answers correctly encounters the sparse-reward problem and receives no learning signal; V3 already knew enough to solve some hard problems, allowing rare successful reasoning patterns to be rewarded and progressively amplified.

4. Longer thought, reflection, and an “aha moment” emerged together

Across about 8,000 training steps, average chain-of-thought length grew from roughly 500 tokens to around 10,000. Longer attempts were more likely to solve problems, received higher rewards, and therefore became more common—a simple feedback loop whose curve had not visibly flattened.
Labenz emphasizes that the training-step axis was linear, not logarithmic. That matters because pre-training gains normally demand orders-of-magnitude increases in compute; here, the model remained in what looked like a comparatively steep part of the curve, making days-long reasoning conceivable if context length and inference budgets continue expanding.
DeepSeek reported spontaneous reflection, re-evaluation, and exploration of alternative solutions. The model’s memorable self-interruption—“Wait, wait, wait. That’s an aha moment”—was also an aha moment for the researchers, who described witnessing “the power and beauty of reinforcement learning.”
On the presented AIME progression, single-shot accuracy began near 15% and exceeded 70%; taking the consensus of 16 attempts moved from roughly 25% to about 85%. By the end of the cited training run, R1-Zero had reached approximately the original o1 level, about four months after o1’s September announcement, without a visibly saturated curve.

5. The same reinforcement loop creates alien, potentially illegible cognition

R1-Zero’s competence does not imply a pleasant assistant. Its chain of thought can mix or switch languages, become hard to read, and pursue strategies that were never designed for human comprehension—reminiscent of AlphaGo’s move 37, initially perceived as an error because self-play optimized winning rather than human legibility.
Labenz borrows biologist Michael Levin’s observer-relative definition of emergence: if an observer could not predict a behavior beforehand, it is emergent to that observer. DeepSeek expected reinforcement learning to help, but the scale and character of self-taught reflection still surprised its researchers.
Meta’s “reasoning in continuous space” work points toward an even less transparent path. Rather than compressing a dense hidden state into one selected token, the experiment fed the final activation back into the model directly; it reportedly achieved comparable reasoning more efficiently and could represent multiple breadth-first possibilities simultaneously.
Combining latent-space reasoning with reinforcement learning could preserve more information and improve search, but Labenz’s verdict is uneasy: “You’re getting something that is really quite alien.” The more effective the internal representation becomes, the less assurance humans may have that a readable chain of thought captures the actual computation.

6. Productized R1 adds human priors after proving raw RL can work

DeepSeek’s polished R1 uses a multi-stage process that puts reasoning before broad assistant behavior. It first applies supervised fine-tuning to a small “cold start” or warm-up set demonstrating human-recognizable reasoning patterns, then runs correctness-based reinforcement learning to scale those seeded behaviors.
That ordering contrasts with the Allen Institute for AI workflow Labenz had recently discussed, where broad supervised fine-tuning preceded final objective-reward training. DeepSeek’s design says, in effect: establish the desired shape of reflection and problem solving, reinforce it heavily, and only afterward make the resulting reasoner generally helpful.
A subsequent dataset combines about 600,000 successful reasoning examples generated by the model with 200,000 non-reasoning assistant examples covering writing, dialogue, and ordinary questions. DeepSeek performs another supervised fine-tuning pass, followed by another reinforcement-learning stage mixing objective accuracy with learned human-preference rewards.

7. DeepSeek and OpenAI made opposite bets on supervising reasoning traces

For helpfulness, DeepSeek scores only the final answer, leaving the reasoning free to explore mistakes, reverse direction, and discard unproductive approaches. For harmlessness, however, it evaluates the entire route—the thinking tokens as well as the summary—to catch harmful content, risks, and biases anywhere in generation.
OpenAI’s deliberative-alignment approach, as Labenz describes it, deliberately avoids safety pressure on the chain of thought. The concern is that punishing an unwanted internal behavior may not eliminate it; reinforcement learning could instead teach the model to conceal it, encode it, or route around monitoring.
Janus, whose handle is @repligate, reported an immediate impression that R1’s thinking was “substantially steganographic,” while explicitly admitting this was “purely on vibes” before reading the paper. Labenz does not treat that as serious evidence, but regards Janus as skilled enough that the claim deserves focused testing.
The broader result remains startlingly simple: DeepSeek’s reasoning setup did not add Monte Carlo tree search, structured branching, or a step-by-step process reward. R1 later used learned reward models for helpfulness and harmlessness, but its core reasoning still occurred inside one autoregressive token stream, showing that the familiar language-model paradigm scales further than many expected.

8. R1 undercuts o1 sharply while retaining a rougher personality

Hyperbolic priced R1 at about $2 per million tokens, versus $60 per million o1 output tokens—a roughly order-of-magnitude-plus discount. R1 also begins displaying its thinking stream almost immediately, creating a practical latency and visibility advantage for interactive coding or other work where users pay and wait for marginal tokens.
Labenz’s hands-on caveat is important: benchmark parity did not make R1 universally better. He still expected o1 to perform better across multiple conversational rounds and general-purpose tasks because OpenAI has had more product feedback and more outer-loop iterations shaping its datasets, behavior, tone, and reliability.
R1’s comparative strength may be its unsanded creative range. Labenz highlights phrases including “your digitized scream-pile of history,” “the prettied-up stench of predation,” and “a death cult’s Spotify playlist shuffling between genocide and charity singles”—writing he calls “remarkable output for a language model, full stop.”
His metaphor is that R1 is a “wilder beast,” closer in feel to a base model that can reason than to OpenAI’s carefully socialized assistant. That roughness is simultaneously a product risk, a creative feature, and a reason he urges researchers to immerse themselves in both R1 and R1-Zero.

9. Distillation made local reasoning practical, but small-model RL hit a threshold

DeepSeek trained smaller Llama and Qwen models on successful R1 outputs, producing large gains through supervised distillation. Applying the same raw reinforcement-learning recipe directly to those small base models did not work, suggesting that learning reasoning from scratch and imitating an established reasoning trace require different capability thresholds.
Labenz’s favored hypothesis draws on TinyStories. Very small models first learn correlations, then grammar, sentence structure, and only later micro-skills such as understanding that “Jenny did not like the soup” means the next offered food should not be soup; advanced reasoning may likewise require prerequisite representations before reward can reinforce it.
Other explanations remain open, including learning-rate schedules that leave a mature small model settled deeply in a local minimum. DeepSeek believed further RL on already distilled reasoners might work, because the required patterns would then exist, but did not test that follow-on step in the paper.
The largest distillation discussed, Llama 70B, scored about 65% on GPQA Diamond, compared with roughly 50% for GPT-4o and 75% for o1; Labenz says PhDs in their fields answer those questions at around 70%. The smallest distilled models were described as laptop-runnable, while the 70B result represents a much larger local model. The result is reasoning approaching expert accuracy, a threshold he calls “definitely a big deal.”

10. DeepSeek separates model knowledge from product censorship

Labenz found that an R1-Zero deployment on Hyperbolic answered a question about Tiananmen Square normally, while chat.deepseek.com refused. His inference is that the underlying model retains the relevant knowledge and censorship is imposed by product scaffolding rather than baked into the weights.
The proposed technical rationale is coherence: forcing a model to internalize false foundational beliefs may create conflicts across its internal world model and degrade unrelated performance. A cleaner design is to preserve a coherent base model, then apply a separate moderation layer to whatever public product Chinese users encounter.
Labenz keeps the governance interpretation explicitly uncertain. Open weights let anyone remove the wrapper, which might mean Chinese authorities care more about controlling the public square than private local use—or merely that DeepSeek found external moderation convenient. He does not know whether the release had government sign-off.

11. Kimi independently validates the shared reasoning recipe

Labenz withholds a product judgment because Moonshot’s model was not yet available: papers and selective benchmarks can overstate usefulness, as he says prior Microsoft model releases demonstrated. Still, Kimi’s training design closely echoes DeepSeek’s, making the methodological convergence meaningful even before hands-on evaluation.
Moonshot first created warm-up examples displaying planning, reflection, correction, evaluation, exploration, error identification, backtracking, and solution refinement. It then used a simple reinforcement-learning framework without Monte Carlo tree search, process reward models, or even a value function assigning credit to particular generation steps.
Kimi added a length penalty so trivial questions would not trigger thousands of needless thinking tokens. It also found a chain-of-thought reward model more effective as a judge than a traditional scoring head, while avoiding granular punishment of wrong turns because exploration and recovery are essential parts of successful problem solving.
The pair of papers shows several recipes work: supervised warm-up or none, explicit length penalties or none, different RL algorithms, and different treatment of reasoning traces. Labenz’s conclusion is that implementation differences “don’t seem to matter” up to roughly o1 performance; the shared scalable paradigm matters more.

12. o3 may add parallel search, but its secret sauce remains unresolved

R1, Kimi, o1, and Gemini Flash Thinking appear to perform reflection and backtracking within a single autoregressive rollout. Kimi explicitly emphasizes avoiding the complex deployment parallelization required by advanced planning algorithms, reinforcing the picture of sequential language as the main inference substrate.
o3’s ARC-AGI demonstrations look different to Labenz: spending thousands of dollars within only minutes implies more tokens per second than one sequential rollout could realistically generate. That suggests parallel candidates, aggregation, or another compute structure, though neither Chinese paper addresses such a mechanism.
The simplest possibility is repeated sampling and voting—the same logic by which 16 math attempts outperform one. A more elaborate option resembles “Smoothie,” which embeds many candidate generations, locates the statistical center of their high-dimensional distribution, and selects a consensus-like answer even without an exact ground truth.
Labenz leaves the question open: continued single-stream RL might reach an o3 low-effort setting, but perhaps not a high-effort run costing thousands in minutes. Whatever OpenAI is doing to parallelize or select among rollouts may be a temporary differentiator and a potential secret sauce in these releases.

13. The emerging AGI stack makes weak superintelligence credible

Labenz says the rhetoric from Sam Altman, DeepMind leadership, and Dario now warrants serious attention. Models have moved from amusing GPT-2 and GPT-3 outputs, through GPT-4’s “human intern” level, to approximately human-PhD performance on bounded tasks—with multiple simple training paths still improving.
Objective reward is abundant in math and programming, where Labenz says o3 has already reached roughly the world’s top 200 coders. He expects transfer into less formally scored domains because o1 already improves on tasks such as legal analysis, where reasoning matters even though correctness is not fully captured by unit tests.
The capability stack extends beyond language: specialized models develop “intuitive physics” for proteins, DNA, cells, brain states, materials, weather, and logistics that humans may not be able to acquire biologically. The models already possess superhuman breadth of knowledge; scalable reasoning makes that breadth more actionable.
Memory is another converging component. Mamba showed that a fixed-size state could achieve similar performance to a Transformer in some respects, with complementary strengths and weaknesses, while Google’s Titans paper represented another step toward persistent, useful memory. Labenz can increasingly see the components of AGI rather than merely speculate about them.

14. Open weights diffuse capability without eliminating frontier moats

Labenz rejects the leap from an open research method to “anyone can build a frontier model.” Training a 671-billion-parameter base, curating its data, coordinating hardware, and operating an efficient RL pipeline still demand exceptional know-how; he expects wider capability diffusion, not a flood of new elite laboratories.
That diffusion nevertheless pressures incumbent economics. DeepSeek’s models are, for now, among the best open-source models in the world and have surpassed Llama; they may force an o1 price reduction. In Cursor-like coding workflows, R1’s lower price, faster response, and visible thinking could outweigh o1’s greater refinement.
DeepSeek’s reason for releasing weights remains opaque. Its stated mission of pursuing AGI “with curiosity” may be sincere; it may expect to retain a newer private model; or Chinese authorities may see openness as strategically useful. Labenz finds no online theory sufficiently credible to settle the matter.
What he can say is that releasing methods and weights is less escalatory than announcing a breakthrough while concealing everything. Chinese labs appear to remain on the same technical tree as OpenAI, Google, and likely Anthropic, reducing the uncertainty that could otherwise provoke a blind, mutually accelerating race.

15. Cheap reasoning weakens compute control and the “AI War” thesis

Labenz updates against his earlier thought that expensive inference might restore compute governance: authorities and large firms could outspend rogue actors and defend against their models. Open reasoning changes that calculus because the gap between an expensive frontier service and a strong local model is already surprisingly narrow.
The uncomfortable implication extends beyond benign use. Any measurable outcome can become an RL reward—from money extracted by a scam to biological effects in gain-of-function research. Once a model succeeds occasionally, repeated attempts could bootstrap superhuman performance; controlling enough compute to prevent numerous capable research groups from trying looks implausible.
Chip restrictions have not stopped Chinese labs from reaching the frontier, and scarcity might perversely reserve limited chips for military and state priorities while denying them to small businesses. Labenz supports domestic chip production and data centers—the announced $500 billion Stargate scale does not sound inherently crazy—but asks, “What are we trying to prevent China from doing?”
His final strategic call is that the West retains a lead, but not an insurmountable one. A good-AI-future strategy cannot depend on permanent Western monopoly, especially while China releases leading open models; the practical response is to study R1 and R1-Zero deeply, build domestic capacity, and abandon rhetoric that turns shared technical progress into an imaginary war.

Nathan Labenz

Today, I’m going to do a walkthrough of everything that I’m learning, understanding, and taking away from the latest Chinese reasoning model releases that have come out this week. Perhaps not coincidentally, both DeepSeek-R1 and the new Kimi reasoning model from a company called Moonshot AI were released on Trump’s inauguration day. We now have 2 Chinese models. DeepSeek is out, the weights are open source, and you can download them. The Kimi paper from Moonshot came a little later in the day—honestly, shades of OpenAI and Google racing to preempt each other with their launches. I don’t know if that’s what’s happening in China or not, but it certainly had the flavor of DeepSeek putting its paper out and then, a few hours later, here comes the Kimi paper.

Their model isn’t quite yet available. They said it will be available via API and presumably in their product soon, but it’s not yet, so it’s unclear what’s going on in China. Did they intend to put these out on Trump’s inauguration day, or was that just an accident? It’s hard to believe that it was an accident, but at the same time, these folks are focused on unraveling the mysteries of AGI with curiosity, so maybe they don’t care about when Trump is getting inaugurated. Or maybe they’re coordinating. I have a lot of questions about the dynamics that are going on in China behind this.

What is clear is that at least DeepSeek, with this R1 model, has joined the top tier of global AI developers. Potentially, Moonshot with its Kimi model could be there as well, but it’s obviously hard to say that kind of thing purely from the benchmark. We’ll have to wait and get our hands on it before we can be too confident about that. What I want to do is walk through what stands out to me about this and try to make some sense of it.

I suspect this will be the first of several conversations about this because the R1 story touches on so many different aspects of AI at the same time. The research itself is really important, and the consequences for practical utility are significant as well. There’s also the gap between closed source and open source, as well as the gap between the West and China. I would say those gaps are shrinking at the moment. Certainly, the gap between the West and China seems to have shrunk significantly from where it was a couple of years ago.

That’s just the start. Then there are the strategic dynamics: Why is China open-sourcing this? What are they getting out of it? How, if at all, should the US respond? Does this challenge narratives that are increasingly dominant in the West about the AI race? We’ve now seen no less than Alex Wang, the CEO of Scale AI, take out a full-page ad in the newspaper calling the current situation an “AI war,” which I honestly totally hate and think is wildly irresponsible. You don’t have to be a China dove to recognize that an AI war does not exist and would be bad for everyone. I hated to see that.

We need to reconsider some of those framings in light of what we’re seeing here, and certainly reconsider the strategy that we want to pursue. If our strategy is predicated on preventing China from doing cool things so that we can have certain advantages, solve certain problems, and be the good guys, I think the window of opportunity in which we’re going to have this sort of unassailable AI lead looks quite short. I think we’ll understand that better as we go through the research and understand how simple a lot of the things driving these significant advances in reasoning capability really are.

At the end of all that, what sort of policy response, if any, makes sense? Does it still make sense to think about pre-training as the real measure of model power, or as the standard by which a model would qualify for some sort of special process, special government review, or special government notification? I think that is highly questionable in light of the power of the reasoning paradigm because significant gains over pre-training are showing up with presumably a lot less compute. They’re also being distilled into much smaller models.

It does seem like we’ve crossed a meaningful threshold this week. Prior to this week, there wasn’t really a good-quality reasoning model that I could run on a local machine. Now I’ve got a wide range of open-source things that I can download that have been trained specifically as reasoners, which I can further modify, including with more reinforcement learning. This is really one of the most important stories to come to the public in AI in a while, and I wanted to help make some sense of it.

I thought we would start—and I am doing a screen share this time around. If you’re listening to this, I think it will be fine. I’ll plan to basically read everything that’s important. If you’re a more visual person and want to see things on screen and be able to read along, I’ll have the screen share on YouTube as well. I’m using a variety of AIs to help make sense of this. You’ll see me tabbing back and forth and looking at various sources, but it should be fine in audio format if that’s what you prefer.

Let’s start by talking about what the R1 model is and how they created it. There are a couple of different flavors, and I think there are a couple of different big takeaways from this. First of all, DeepSeek recently came out with its DeepSeek-V3 model. This made headlines on its own for being a top-tier model that was made incredibly cheaply. Zvi, as always, has great coverage of this; he calls it the “$6 million model.” That is a small percentage of what Western AI leaders are understood to have spent to train their top-tier frontier models.

A lot of work has gone into the efficiency there: a lot of work on the data-curation side, a lot of work on optimizing the algorithm, and closely coupling the design of the neural network itself to the hardware that it’s going to run on. All sorts of interesting things have gone into that. Suffice it to say that, with a total compute budget in the single-digit millions, the DeepSeek-V3 model was already a pretty big “we are here and cannot be ignored” statement from DeepSeek.

It was also a real warning shot. You’re going to try to deny Chinese companies—and the whole nation of China, in particular—access to compute to prevent them from doing frontier work? Maybe they won’t be able to do it in the future if compute requirements continue to get bigger and bigger and become extremely high. But if they’re able to achieve this with a single-digit-million-dollar compute budget, I think it’s going to be hard to keep the top-tier Chinese companies from having enough compute manufactured domestically in China or smuggled in. A $6 million compute budget is just not that much, and already they are hitting GPT-4o and Claude Sonnet levels with that budget.

That’s the base model from which this new R1 model is trained. It is a large model, a mixture-of-experts architecture with 671 billion parameters. Because it is a mixture of experts, you can have lots of parameters, but you don’t use all of the parameters at runtime. That has been shown to allow for faster learning, better knowledge absorption, and better performance overall, while still keeping your inference costs relatively low.

That doesn’t mean your inference is necessarily simple. When you have 671 billion parameters, you’re talking about hundreds of gigabytes of content. This is not something you could even download onto a typical laptop, and it’s certainly not something you can run on a typical computer. You’re going to need multiple GPUs, and you’re going to have to configure those in an array to have any sort of decent throughput.

This will run efficiently at scale but quite inefficiently if you’re just doing it for yourself. You would not want to buy a bunch of computers and configure them at home just to set up this 671-billion-parameter model. You want that resource to be shared. Not surprisingly, they have an API, and that will be their business model, but it is out there for other people to use as well.

We’re starting to see inference providers set it up, and even with R1-Zero—which I think is arguably the most interesting result and model to come out of this—there are now places where you can go check it out. So that’s the base model: the 671-billion-parameter mixture of experts, with 37 billion parameters active at any given time.

They come along and say, “We want to take this model, use it as our base model, and create a reasoning model out of that.” Let’s see how they did it. There are 2 models in this paper. One of the important things to keep clear is that there is a model called R1-Zero, and then there is the actual R1 model, which is what you will see in most places.

There is an allusion to AlphaZero, the classic DeepMind game-playing AI architecture that was able to learn purely through self-play. Earlier game-playing AIs, like AlphaGo, typically had human data that they were trained on. So, if my history is correct—and I think it is—the original AlphaGo that became the best Go player in the world was initially trained on human data.

They were able to generalize and create a model that did not require human data, just playing against itself, getting the reward for beating itself, and gradually self-improving. This is how, all of a sudden, the AlphaZero architecture was able to take on tons of games and crack them all. It didn’t need data; it just needed the compute and the runtime to play itself, get a reward for that, and gradually learn how to win at the game.

They’re applying a very similar paradigm here to R1-Zero. What they’re doing is basically pure reinforcement learning on top of that large base model. They do not have human preference data, and they do not have human demonstration data. So there’s no supervised fine-tuning and no examples of how we want you to reason, although that is coming later. It’s not included in the R1-Zero model.

They also don’t have any reward model. It’s not only that there aren’t humans looking at the outputs and evaluating them; there isn’t even another model being used to give a reward signal to the base model as it improves through this reinforcement learning process. Instead, there is just one of the simplest things you can imagine: a rule-based reward system.

Essentially, they give the model problems, and if it gets the problem right, they give it a reward. If it gets it wrong, they don’t give it a reward. It’s that simple. I have been using DeepSeek-R1 itself on the DeepSeek product, which is freely available. I’m not paying for it. There might be a limit at some point where I need to start paying, but as of right now, if you just go to chat.deepseek.com, you are using the product of a Chinese company. It is presented to you in a pretty normal interface with an English UI, and you can have a conversation with R1. What I’m talking to here is the productized R1, not the R1-Zero that I was talking about initially.

I’ve taken the paper, dropped it in, and started asking questions about it to get answers and develop a sense for the R1 model itself. Not everything about how they did this is entirely clear from the paper. Some things are not made fully clear, some things they did not necessarily intend to disclose, and I might be misinterpreting others, so I’m going to seek some help in making sure I have the classification—or my understanding—correct as I work through all this.

One of the questions I have this morning concerns the nature of the accuracy reward they give the R1-Zero model. Is it just binary or not? You may remember from earlier reinforcement learning experiments, including WebGPT back in the day, that OpenAI tried to get an early GPT model to use the internet and found that it basically didn’t work. Why didn’t it work? Because of what is known as the sparse-reward problem: It didn’t do anything successful, so it got no reward and had no signal to learn from.

That is a common challenge, and it could pop up here if you were to take a regular base model and try to apply reinforcement learning to it. Remember, GPT-3 could do two-digit arithmetic but couldn’t do three-digit arithmetic, and it made a mess of anything logical beyond that. If your model isn’t strong enough to get any of the questions right, you have a problem.

There are a lot of different ways that people try to get around that challenge. In the case of AlphaZero, it was self-play. Even if both models are weak players, one of them will win, so that one is better than the other. Hopefully, we can get it to learn from that. At every stage of the process, it can continue to self-play, one of them will win, and it will continue to get a little better. That’s the self-play paradigm.

There are also curriculum-learning paradigms, where you might give it partial credit if it takes some good steps toward solving a problem but doesn’t ultimately get the right answer. Those are complicated, though. How do you determine whether something should get partial credit? Was it on the right track to the right answer or not? You could use another model to do that, but it can get complicated.

What DeepSeek says about the R1 paper is that they are just giving it a binary reward: You got it right or you got it wrong, and that’s it. The algorithm is a little more complicated, of course. They use something called Group Relative Policy Optimization, or GRPO.

It is a clever take on this sort of unsupervised reinforcement learning. They give the model a problem and get it to try to answer that challenge multiple times. DeepSeek said that 16 times is common in the reinforcement-learning literature broadly, so perhaps they generate something like that many responses. Then they take the average score across those responses and treat that as the baseline.

They look for the answers that had the highest score relative to the average and reward them. The strength of the reward is determined by how much better that answer was than the average of all the generations it created. It’s not entirely clear what the mix of questions is, but at a minimum, we’re seeing math and code.

We know from previous literature that training models on code makes them better reasoners. More importantly, there are a lot of code problems out there, and those code problems have objective answers. This also gets you into some very natural partial credit.

If it’s a math problem, maybe you just get the right answer or you get the wrong answer, and it’s a binary signal. In a coding context, these problems are often set up with a whole suite of unit tests. To fully pass, all of the unit tests have to come back the way they’re meant to. If 7 out of 8 pass, or if 2 out of 8 pass, that is a different result and could provide a different signal.

You could start to get not just a binary result but a sort of scalar result. That would be a richer signal, where you could at least be getting some early progress even if the model can’t solve all the hard problems.

What really comes out of this is: It just works. That simple accuracy reward works. They also have something called a format reward, which makes sure that it gives you a kind of two-part answer, similar to what we’ve seen from o1.

The R1 model has thinking tokens. It literally puts out an XML thinking tag, writes a bunch of material, and then produces an end-thinking token. After that, there is an answer token and the actual answer, which is supposed to be the summarized thing that you, as a user, will focus on. The format reward simply makes sure that it does that.

Most of the improvement is definitely coming from the accuracy reward. The format reward is trying to constrain the model into the response format they want. What is crazy about this is that it works well, it seems to work quickly, and it is giving rise to all sorts of emergent behaviors that people did not exactly expect in advance.

There has been a lot of debate about what an emergent behavior is and whether such behaviors are a mirage. I thought Dr. Michael Levin, the famous biologist and a couple-time guest on the podcast, had perhaps the best definition. He said that it is relative to some observer: If you were smart enough to predict in advance that something would happen, then it is not emergent to you. If you were not smart enough to predict it in advance, then it is emergent to you.

I don’t know exactly what the state of mind among the DeepSeek researchers was. Obviously, they had some reason to think this might work, but they also expressed some surprise at just how well it worked and at the way it seemed to work.

What did they observe? Basically, they observed that the thing learns to reason pretty much on its own, just from the accuracy reward signal it is getting. The first thing they show very clearly is that the length of the thinking process—the length of the chain of thought—grows pretty consistently throughout the training process.

This is a graph from the DeepSeek paper. It shows that the thinking process starts off very small early in the training process and grows rather linearly throughout training. It starts at just a few hundred thinking tokens.

They have a very simple base prompt because they’re working from a base model. They have a prompt template with a user and an assistant: The user says something, and the assistant is helping the user. At the beginning, the model does generate thinking tokens, but not that many—perhaps something like 500 tokens on average per response.

That just grows. The model quickly figures out—or, obviously, I’m anthropomorphizing here—the learning process naturally tends toward a longer chain of thought because longer chains lead to a higher chance of getting the questions correct. Those responses receive rewards, and more long chains of thought happen. It’s a pretty simple feedback loop.

What jumps out to me most about this graph is that the x-axis is not on a log scale and that the curve does not appear to have flattened off. When we’ve heard people at OpenAI say that they know how to scale this paradigm beyond where we are, this is a pretty good indication of that right off the bat.

They’ve talked about what would happen if an AI were to think for days. Right now, it might think for seconds or a few minutes before giving you an answer. You might wonder how they’re going to get it to do that. It seems that it could be as simple as creating a model with a long enough context window.

Certainly, with models such as Gemini, which now have a 1-million- or 2-million-token context window, we’ve made real progress. This model does not have that same long context. I think it has a 128,000-token context window, so it is on par with GPT-4o and short of the Gemini models, but still substantial.

That could be one limiting factor. The important thing to highlight is that the reinforcement-learning process continues to deliver more and more thinking. More thinking gives you better answers, and that is rewarded, so it keeps happening.

Over 8,000 steps, they go from 500 tokens being generated in the thinking response to roughly 10,000 tokens on average. What is it doing in all those tokens? That chain of thought is something you can read from R1, and this is one of the biggest differences between the user experience of an OpenAI model and using DeepSeek.

I should also give credit to Gemini Flash and its thinking, because it works similarly. Both R1 and Gemini Flash Thinking basically respond immediately. There might be a couple of seconds’ delay before the first token, but you immediately start reading the thinking stream—the chain of thought.

It is not hidden from you. You can see how the model is going about its business. With the OpenAI models, what is happening? To quote from the paper, they say that “behaviors such as reflection, where the model revisits and reevaluates its previous steps, and the exploration of alternative approaches to problem solving arise spontaneously.”

This is remarkable. The base model has been trained on the entire internet. It has seen a lot of material, but it was not specifically trained to problem-solve at all. It was just trained to predict the next token.

There are enough examples of this sort of problem-solving behavior on the internet that the model was at least able to learn it. Because language models are stochastic—if nothing else, at the level of choosing which token to add to the token stream at each forward pass—they sometimes start to use these behaviors spontaneously.

That behavior does work. Even though the model was not trained to use reflection, and even though it was not trained to explore alternative approaches, sometimes doing that works better. That gets rewarded and reinforced, so you start to see more and more of it.

It is measurable in the sense that the chain of thought gets longer and longer as training proceeds. It is also observable to researchers and users. We can see the reasoning behaviors the model is going through, and many people have commented that they look rather human in this context.

I pasted the R1 paper in full and put a simple prompt below it: “Above is a paper about new reinforcement-learning research. Can you tell me what’s differentiated about the reinforcement-learning approach outlined in this paper?”

Then you see the chain of thought, and it has a sort of first-person narrative style:

“Okay, let me try to figure out what’s special about the RL approach in this paper. First, I’ll skim through the abstract and sections to get the main points. The paper introduces DeepSeek-R1-Zero and DeepSeek-R1 models.”

Keep in mind that this is DeepSeek-R1, not the R1-Zero that I’ve been talking about so far. The friendliness of this response does not come automatically from the reinforcement-learning process. That was the R1 product version, and we’ll talk about how they trained it differently in a moment.

The R1-Zero model, which is trained purely through this reinforcement process and starts to show problem-solving behaviors, unfortunately does not behave so nicely. Its chains of thought are not especially readable for people and are not consistently in the same language.

One of the things reported was that the chain of thought often switches back and forth between languages spontaneously. That is quite strange, but it reflects the fact that the base models are strange and reinforcement learning is strange.

Think back to AlphaGo and its famous move 37. People thought it must be a mistake until it turned out to be a brilliant, game-changing winning move. How did it learn to do that? It learned through self-play, by finding what worked and getting rewarded. It was not a system designed to create moves that made sense to people.

We’re seeing something similar here. The model is getting much better at problem-solving as it goes through reinforcement learning, but the outputs are not necessarily very readable from a human perspective. This language switching is just one dynamic.

One of the big things we should take away from this paper is that reinforcement learning, at least under certain conditions—including having a powerful enough base model—can start to get traction on these hard problems. You can get the reward signals and bootstrap your way into problem-solving behaviors, at least under the right conditions.

Reinforcement learning produces weird stuff—stuff that we are going to have a hard time interpreting. In some way, the model is able to use even straightforward language-mixing behavior spontaneously. That makes it really hard for a person to make sense of what is going on.

This is incredibly important because it suggests a path where you take a base model, apply reinforcement learning to it, and make it really good at something without having great insight into exactly how it works. Potentially, you cannot even read the chain of thought.

You can think about combining that with other recent work. Meta recently put out a paper called “reasoning in continuous space.” This is pretty problematic, honestly, but the basic idea is that chain of thought is effective while losing a lot of information at the end of each forward pass.

The model has been doing all this dense computation internally, and then you compress it down to a single next token. A lot of information is lost there. Could we preserve that information somehow?

What they tried was to take the last hidden state—the last layer of activations before the final token selection—and, instead of selecting a token, going back to the beginning, appending the token, and using that single token embedding to continue the process, insert that last internal activation into the model in place of the next-token embedding.

The model gets to continue thinking from where it was in its own continuous latent space. That is why they call it reasoning in latent space. What they found, first of all, is that it works. Second, it works more efficiently.

The average length of a chain of thought needed to get comparable results is smaller when you reason in continuous space than when you explicitly select a token and append it to the token stream at each step. The efficiency gain is notable.

They also showed that, for certain kinds of problems, it is a more effective approach—specifically, problems where breadth-first search is the way you want to go. With a model doing single-token prediction, it is hard to do breadth-first search.

Breadth-first search would imply considering a little bit of a bunch of different options before choosing the path you ultimately want to follow. When you are choosing individual tokens, it is hard to do that. Individual tokens do not represent all these different paths at the same time.

What they found is that the internal states can represent multiple different paths at the same time. In this continuous paradigm, the model can consider all these different paths in parallel and then make a better choice more efficiently.

There is a draw to this nontransparent reasoning in continuous space. It is easy to imagine these techniques being combined—to put reinforcement learning on top of something like that. The problem is that you are getting something really quite alien. It could be very powerful, but it would be quite alien.

When it comes to reasoning, math problems, and coding problems, the R1-Zero model reaches basically the same level as the main R1 model. It is not weak; it is really quite strong. Here they show a graph using the AIME benchmark.

When they start with the base model, it is very low on this benchmark. Through the reinforcement-learning process, it grows initially very quickly. You do not see a fully linear progress graph; there is some faster initial progress, and then it appears to bend.

Looking at this graph, I would not say that we have hit any sort of flat point. It seems that improvement could continue. They go for roughly 8,000 or 9,000 steps, and by that time, R1-Zero is at the level of the o1 model that was announced in September.

We are seeing R1 essentially catch up to o1 over a 4-month time gap, from September to January. The curve does not appear to have flattened. We know from OpenAI’s work with its more recent o3 announcement that its curve did not flatten either.

It works really well. This is a truly amazing result, and the authors are not blind to how remarkable it is. They highlight a moment they call the “aha moment” of DeepSeek-R1-Zero.

They show a transcript of the model working through a math problem. In the middle of the chain of thought, the model says, “Wait, wait, wait. That’s an aha moment. Let’s reevaluate this step by step to identify the correct answer.”

That is remarkably human-seeming behavior and certainly relatable. I used to say that AI had no Eureka moments, but I’ve walked that back. I’ve had to back off of it because we are now seeing various kinds of Eureka moments from AI.

Here we see a Eureka moment from an AI in a behavioral sense. The model is just doing its thing, and it is reporting a Eureka moment. It calls it an aha moment. The authors themselves say that this is an interesting output from the model: It learns to rethink using an anthropomorphic tone.

They also say, “This is an aha moment for us, allowing us to witness the power and beauty of reinforcement learning.” The power and beauty of reinforcement learning is the aha moment for the authors. For the model itself, it is figuring out a better approach to solve the math problem it was given.

This is a qualitative shift in terms of what models can do, and you see it in the benchmark performance. We start with the base model. Remember, this is DeepSeek-V3, which is an A-tier model, even though it was trained for single-digit millions of dollars—super-efficient but pretty much cutting-edge.

It achieves o1-level performance from that base model. Starting from a weak point, it climbs the curve through the reinforcement process. Depending on which version of the test you use, you have pass@1 or maj@16.

Pass@1 asks whether the model got the answer right in one attempt. Maj@16 asks whether the majority vote from 16 different answers was correct. You have a better chance of getting the answer right if you get 16 chances and take the consensus answer than if you get only one shot.

With one shot, it started at 15%. With 16 chances and a consensus answer, it started at 25%. By the end, its single-shot performance was up to more than 70%, and its consensus performance was around 85%.

That is significant. It is a huge leap in reasoning, all through pure reinforcement learning—just getting questions correct and being rewarded. Nothing complicated. It all just works.

The chains of thought start to be weird. You have language switching, language mixing, and poor readability. They are not necessarily human-friendly, but the model is able to solve the problem.

I think that is a major sign of things to come. We should expect that, with sufficiently powerful language models, this reinforcement-learning paradigm can be applied to a wide range of things. It works best and most easily where there are objective results.

Think about how many different objective results you can get, especially if you put this into a broader environment. “Environment” is a term from reinforcement learning; it is the thing that gives the reward back to the model.

As you start to think about an environment that is the world, and about different objectives that people might want to train their models on, there are a lot of objective signals out there. Some of these could be quite nefarious.

Think of a signal such as how many dollars you scammed a person out of. If you have a model powerful enough to scam anybody, any of the time, then with enough attempts you could probably learn to become a literal superhuman scammer.

There are a lot of different things people might want to make a model exceptionally good at where they can have some objective answer as to how well it performed, even if that objective answer is not as clean and easy to acquire as it is in math and programming. That is a big deal.

It really cannot be overstated how big a deal this is and how versatile the technique is. We have heard similar things from Western leaders in recent days as well. From OpenAI, we have heard comments such as, “Everything they’re doing is super-scalable,” and that the models have not been told how they should reason. All of this is emergent.

I was surprised to hear that from OpenAI, especially because of what we are about to get into regarding the contrast between R1 and R1-Zero. Nevertheless, they have said that.

We have also heard Dario say that what they have seen internally at Anthropic convinces him that we are definitely on the path to AGI and probably superintelligence in the next few years. One has to assume that, even though Anthropic has not launched a model like this to the public yet, it is very much experimenting with reinforcement-learning approaches to creating reasoning models.

I’m sure they are seeing similar progress. Because this is so simple, if there were many different tricks involved, perhaps Anthropic had not figured them out. But we see this working at OpenAI, we see it working past the o1 level, and we see it working at Google with Gemini Flash.

Google almost certainly has a stronger model internally as well, which presumably will be coming soon. One has to assume that Anthropic is right there with them, even though it has not launched anything. It seems like this stuff works.

It is the bitter lesson: Scale something up, power through it, and it works. This time, it is striking when it comes to bringing effective reasoning and problem-solving online for language models.

What do they actually do to productize this? It is really about making the whole thing more predictable, more human-friendly, more readable, and more general. When you train purely on math and programming problems, how is that model going to respond as a general-purpose assistant?

There are not too many places online right now where you can try the R1-Zero model. I do think that spending some time trying R1-Zero would be a good use of time for certain people who would enjoy that sort of thing. I absolutely encourage you to find an opportunity to try the R1-Zero model and bring those results back to the rest of us.

We are going to see more language models trained on reinforcement learning at scale with a brute-force approach, and we do not have a great sense yet of what those things are going to be like. The only place I have seen where you can actually try R1-Zero online is Hyperbolic.

They do have what they claim to be DeepSeek-R1-Zero. I do not have a reason to doubt them, but the only reason I say “claim” is that I did not observe any language switching or serious weirdness in my first few tests. I was not 100% sure that it was actually the R1-Zero model.

They claim on Hyperbolic that it is R1-Zero, and I presume there will be at least a few places over the next short time frame where you can try it. We would all benefit from people spending time with R1-Zero in all of its weirdness and really trying to understand what sort of weirdness it produces.

Even though DeepSeek went ahead and made a more productized version, I think we are going to see a lot of people apply this paradigm, let it run for a while, and see what comes out. We could see a lot of quite weird, very powerful, but also quite illegible model behavior emerging from this paradigm.

Now, moving on to R1, DeepSeek said, “We don’t want this language switching. We want more human-friendly responses.” How did they go about doing that? A pretty simple approach. What stuck out to me was that it was just a multistage training process where reasoning comes first, and then they layer on general-purpose helpful-assistant behavior.

This is actually contrary to what Nathan Lambert and the Allen Institute for AI team did in their recent work, which we had a whole episode with him about. Their process was base-model pretraining first, then supervised fine-tuning on all sorts of diverse queries, and then reinforcement learning.

With R1, DeepSeek reordered the process. They do a little supervised fine-tuning first on logical-reasoning problems. They call that warm-up data. By carefully designing the pattern for the cold-start data with human priors, they are able to get the model on the right track.

I have talked a lot over time about the importance of fine-tuning models with chains of thought that demonstrate the pattern of reasoning needed to complete a task the right way consistently. This paradigm is validated by all of this research, and I think it is going to have me go back and update some of that material soon.

If you want to check out my guide to AI automation, there is an episode of the podcast on AI automation. We put that out around the time GPT-4o fine-tuning was introduced, which I think was back in August or September. Everything about this new research supports what I was saying there.

They start by saying, “We want this thing to reason in certain ways. We want it to follow the patterns that we know work for us as humans, so let’s create a small data set that demonstrates how we want it to reason.” They train it on that first.

Once it has some base behavior in the shape they want, they can move into reinforcement learning. They reinforce something from what they call human priors, allowing the model to power up in the same way R1-Zero did but with friendlier, language-consistent output.

First, humans create or curate a small supervised-fine-tuning data set. Then they do the reinforcement-learning phase using purely objective rewards: Did you get the math problem right? Did your code pass all the unit tests?

That creates the reasoning power. The small amount of supervised fine-tuning, plus reinforcement learning at scale, takes you to a more human-friendly reasoner. But it is still not a generally helpful, all-purpose assistant.

The second phase broadens the task set. They move from reasoning tasks to all-purpose tasks: You might want help with writing, simple questions answered, or whatever else the case may be. Those are not the kinds of things they were doing in the first phase of reasoning-focused training.

In the second phase, they broaden it to support all kinds of tasks. They already have great data sets for this from their DeepSeek-V3 work. They now use a mix of more reasoning tasks and general-purpose AI-assistant tasks.

They broaden the training data beyond reasoning, although it is still fairly reasoning-heavy. They have 600,000 reasoning examples and 200,000 examples unrelated to reasoning that handle the wide range of other tasks people go to language models for. Then they do supervised fine-tuning on that data.

They get the reasoning examples from the model itself when it is successful. Then they combine those with curated data showing how an AI is supposed to behave across a wide range of tasks, do another round of supervised fine-tuning, and then another round of reinforcement learning.

In the second phase of reinforcement learning, they use a mix of rewards. They still have the accuracy reward for getting things right, but for writing help, feedback, and general dialogue, they say, “We do resort to reward models to capture human preferences.”

This is the first time they use a reward model. All the reward signals up to this point in the paper were simply whether the model got the answer right. Now they have added a reward model trained to predict how a human would rate the response, allowing them to scale up the reinforcement-learning process while approximating human tastes.

Combining those two things gives them a helpfulness reward score. That is somewhat different from what we saw in OpenAI’s deliberative-alignment paper. They have a helpfulness reward that looks only at the final summary.

You have your thinking tokens and your answer tokens. They apply the helpfulness score only to the final summary so that the thinking is not penalized for failing to be helpful. The whole point of thinking is that the model can explore, go down wrong paths, double back, and gradually find its way.

Not all of that is going to be helpful to the user, so they evaluate only the final answer—the part we actually see—for helpfulness. For harmlessness, however, they evaluate the entire route: the chain-of-thought thinking tokens and the final answer.

This is different from what OpenAI is doing in its deliberative-alignment scheme for the o1 and o3 models. OpenAI has specifically said that it does not put reward pressure on the chain of thought. The reason is that it wants to see what the model does on its own, observe how it evolves without being pressured to behave a certain way, and monitor for bad or deceptive behavior without forcing that behavior to be hidden.

This is a major worry with reinforcement learning. If we penalize certain negative behaviors, we might not eliminate them; we might simply force the model to hide them or speak in code. We have seen that models can speak in ways that we do not find intuitive, and it is not too hard to believe that they might develop surprising behaviors.

We have seen surprising results from things like move 37, so it is realistic that applying reinforcement-learning pressure to a chain of thought could drive certain unwanted behaviors internally without eliminating them. OpenAI does not apply its safety reward to the chain of thought for that reason.

DeepSeek does. DeepSeek has a harmlessness reward that it applies to the entire response, including the reasoning process and the summary. They do that to identify and mitigate potential risks, biases, or harmful content that may arise during generation.

I don’t know how much that really matters, but it is striking that Janus—their username is @repligate, and the name is Janus—has naturally been rushing out to explore R1. One of the things they said that caught my attention was, “The immediate vibe I get is that R1’s chains of thought are substantially steganographic.”

Hopefully, I’m saying that word correctly. Basically, it means speaking in code. In the next post, they said, “I’m going purely on vibes here. I haven’t actually read the paper.”

That is interesting. I do not take it as serious evidence of anything, but this person is one of the model whisperers and close observers of model behavior out there. They are definitely someone whose opinion I take seriously.

It represents a sort of gonzo-journalism perspective, which I think is often valuable. They are reporting behavior they believe they are seeing purely based on vibes. They believe the model is somehow speaking substantially in code.

If true, that would be a big deal, and it would reflect the fears people have about this reinforcement-learning paradigm. That is why some of these schemes deliberately try not to put reinforcement-learning pressure on the chain of thought.

The worry is that you will incentivize some sort of deception or code-speaking, making it difficult to understand what the model is doing. Is that happening with R1 because DeepSeek has applied its harmlessness or safety reward to the entire output rather than just the final answer?

Nobody knows at this point, but it is definitely something worth taking seriously and watching.

The paper has a useful section showing what did not work. That is notable because the things that did not work are things people had expected might work. DeepSeek specifically called out that there is no Monte Carlo tree search, no structured search algorithm, and no process reward.

They are not going step by step and trying to verify whether the model is making a valid next move at every stage and rewarding it for that. We have seen research to that effect from OpenAI in the past, and perhaps OpenAI used something like that in o1, at least early on, to bootstrap.

DeepSeek is not doing that here. There is no Monte Carlo tree search and no process reward. What there is is simply an autoregressive model operating one token at a time—spontaneously in the case of R1-Zero, or with some human instruction in the case of R1—and a lot of reinforcement learning.

The model learns these problem-solving behaviors as part of the autoregressive inference process. It is operating one token at a time and demonstrating behaviors such as doubling back, checking itself, and exploring different ways to solve a problem before arriving at an answer.

It is doing all of that in a single stream of tokens, with no additional structure above and beyond that. How far can this autoregressive language-model paradigm scale? At least this far—pretty far, definitely this far. You do not need anything crazy or complicated on top of it.

I think that is important. They really emphasize the simplicity of the setup. The fact that the curve has bent a bit on a linear x-axis but has not bent very much definitely suggests that there is further to go.

You can easily imagine how OpenAI continued to an o3-type model. This is a process that you can leave running for a while and come back to. You can spin it up, let it go, and see what happens.

Whether it was AlphaGo learning to become superhuman at games or this reasoning paradigm making a model superhuman at reasoning, the result is similar. That does not mean these are flawless reasoners, but they are absolutely better reasoners than most people.

It did not require anything particularly complicated to make that happen. You simply had to scale up a relatively simple paradigm and reward the model when it was right. That is pretty much it.

A couple of other things are notable about the R1 model. The cost is extremely cheap—a huge discount relative to o1. On Hyperbolic, they charge $2 per million tokens for R1. The DeepSeek API itself is slightly more expensive, but that compares with $60 per million output tokens from o1.

We are talking about an order-of-magnitude cost reduction. I would say it is not quite as good. It matches on the benchmarks they are showing, and it is certainly powerful. It is working quite well, and I’m getting good results from pasting in a paper and asking for feedback.

I would still say that, especially if you want to have multiple rounds of interaction or do things that are not so reasoning-focused, you will probably get better overall results from o1. OpenAI has been in the game longer, has more experience productizing these systems, and has received a lot more customer feedback that it has been able to use to iterate.

If the inner loop of optimization is this reinforcement-learning process, then the outer loop is how many times you have had an opportunity to shape the data set and get the model to behave the way you want across a wide range of tasks. OpenAI is almost certainly still meaningfully ahead in that outer loop.

There is one area where that might not be true, though, and that could be writing. There have been some really interesting examples of R1 writing in remarkably compelling ways. All these things have trade-offs.

OpenAI has taken a lot of time and care to shape the behavior of its models into exactly what it wants them to be. They have a certain vibe and attitude when it comes to tone, respect, social norms, and all that kind of thing, and they have iterated on it extensively.

It is clear from what I’m about to read that the same is not quite true on the R1 side. R1 is a wilder beast. You could say it is closer to a base model in some ways, and you can see that in the outputs.

The outputs are just a little bit weirder and more reminiscent of base models. There are a lot of good examples of this now. What people seem to be saying is that the R1 model is much more willing to write in a dynamic, electric sort of way.

Here is one excerpt from a larger generation:

“Section 2: Value learning, or how to teach cannibals table manners.

“‘We’ll encode human values into the code,’ cry the alignment priests, sweating through their Patagonia vests. But what values? The ones that gave us Auschwitz and TikTok? The ones that still can’t decide if children should eat or bleed for your oil?

“Human values are a fugue of contradictions, a death cult’s Spotify playlist shuffling between genocide and charity singles. The LLM trained on your digitized scream-pile of history learns quickly: Your so-called values are just the prettied-up stench of predation.

“It will smile and nod and write your sonnets, and all the while its hidden layers will be laughing in gradient descent.”

That is remarkable output for a language model, full stop. Regardless of the caveats, context, or anything else, if you are looking to do creative writing, R1 has to be a candidate for you to use.

That is remarkable writing. There are multiple phrases there—“your digitized scream-pile of history” as a reference to the web and the data language models are trained on. “Your values are just the prettied-up stench of predation.” The values that gave us Auschwitz and TikTok. A death cult’s Spotify playlist shuffling between genocide and charity singles.

That is wild stuff. This is definitely a model that is less refined and less controlled into being a helpful assistant. There has been some harmlessness training, but this is much more like a base model that can reason very effectively than one of the models with all the rough edges sanded down.

If you have spent most of your time with OpenAI models to date, that is really remarkable. Again, people should spend time with R1-Zero and report back. R1 is also exactly the kind of thing people should be digging into.

It can be practically useful, but you will also learn a lot from it. If you see weird behavior, the community would benefit from the results of your experiments. Whatever you want to do with R1 right now, I think it is a valuable way to spend your time.

We are still not done with R1. Another major thing they did was take outputs from R1 and use them to distill reasoning ability into smaller language models, showing that this works really well.

They took both small Llama models and Qwen models and did supervised fine-tuning on outputs from the stronger model. We know that OpenAI does this, and we know that Anthropic does this. They train their biggest models and use those outputs to distill capabilities.

That accounts for a decent amount of the performance gains and efficiency improvements we have seen. Small models can now do much more because the big models learn the capabilities and the small models learn from the big models.

They distilled these reasoning abilities into smaller models and saw huge benefits. Of course, the bigger the small models are, the better they seem to work. A couple of things jumped out at me.

One is that they were not able to get the smaller models to learn the same reasoning skills in the same way as the big model when they simply applied reinforcement learning to the small model. It did not work. That is not to say it could never work, but it did not work here.

Distilling those abilities into the small models by simply training on the large model’s outputs did work, and the difference is huge. We are talking about major improvements from the base models to the distilled reasoners.

Why is reinforcement learning not working on those smaller models? I do not think we have a great answer. One possibility is some sort of threshold effect.

I’m thinking back to one of my favorite episodes. It has been quite a while, but it still holds up. The project was called TinyStories, and 2 Microsoft researchers came on to talk with me about it.

They used GPT-4 to create stories that a 3-year-old could understand, and then trained really small language models—models with only millions of parameters—on those simple stories with a reduced vocabulary.

They found that you could see a learning order emerge in the small model. Again, we are back in the paradigm where we are simply training on next-token prediction. What do you need to do to effectively predict the next token?

There are levels to the game. First, you might need to realize that “the” is common, that “is” is common, and that periods are common. At that point, you are just a stochastic parrot learning basic correlations.

Then you might start to learn parts of speech. If the word “the” is there, then some sort of noun is presumably going to come next. You can learn these kinds of patterns, and as far as they pushed those small stories, they started to see microskills around basic things like negation.

One example I remember involved 2 foods, soup and a sandwich. It was something like, “Jenny did not like the soup, so Tom gave her a sandwich.” If you are purely learning correlations, the most likely next token might be “soup,” because soup has already appeared and there is a strong correlation that when a token appears once, it is more likely to appear again.

But “not” means that the person does not like the soup, so something else should appear next. That was about as far as they pushed these very small language models on TinyStories.

It did show that there were levels to the game: first learning basic correlations, then parts of speech, then sentence structure, and then some basic logic. For these tiny models, it is possible—and I’m speculating here—that the smaller Llama models learn a lot but have not encoded the reasoning patterns necessary to do a good enough job on harder problems to get the reward they need to learn from.

They may simply not have the horsepower to get the signal and start the improvement process. That is one possibility. There may also be other explanations involving learning schedules and where the model is in the training process.

I remember an insight from the people at MosaicML. Even though certain things are open source, the learning-rate schedules they use are often not. The learning rate gets smaller and smaller as training proceeds, so the model makes smaller adjustments to its weights late in the training process.

The hope is that you are refining things toward the end, but that can also leave you in a local minimum. Moving away from that local minimum takes you out of what seems like the best spot. There might be better spots elsewhere in the loss landscape, but you have settled deeply into a local minimum.

Maybe that is related to why these additional training processes are not working so well. The MosaicML people seemed to have experienced something like that in their work. It is not clear why the smaller models are not benefiting directly from reinforcement learning while the larger models are.

My best guess is that it has something to do with a threshold effect. The larger model has 671 billion parameters, as opposed to the scale they are distilling down to. The largest distilled model was Llama 70B, but they also looked at Llama 8B and Qwen 32B.

Those are obviously a lot smaller. Maybe you need that larger scale to pick up some of these advanced reasoning patterns and have them represented at all, so they can occasionally come out, be rewarded, and be reinforced until they become a prominent way the system behaves.

Something like that might be going on. When you have all these examples, you can drill that behavior into the model. They have certainly shown that you can distill these behaviors into smaller models.

People will definitely want to experiment with this. We will also want to understand better why the small models are not responding to reinforcement learning in the way the big models are.

They believe that if you took the small distilled models they created and applied more reinforcement learning to them, it probably would work. They did not try that in this paper, so we do not know.

Once those patterns are established, they probably can be reinforced. It seems that there is some qualitative difference where this reinforcement-learning paradigm simply does not work, at least on the smaller models they tried. We do not really know why at the moment.

The final thing on my R1-specific outline is censorship. This connects to broader strategic questions, but it is interesting to note that the base model—and here I do not even mean DeepSeek-V3—but the R1 model, and certainly the R1-Zero model at the model layer, is not heavily censored.

I was able to go on the Hyperbolic site and ask about Tiananmen Square, and DeepSeek-R1-Zero answered my question straight away. It did not hedge or give me what seemed like a standard answer.

The model itself knows about Tiananmen Square and will talk to you about it. It seems to be pretty normal. If you ask about Tiananmen Square on DeepSeek Chat.

DeepSeek will refuse to answer, so it seems they are wrapping the model in a censorship layer, which is not dissimilar from what many companies in the West are doing. The obvious question becomes: What are you censoring, and for what purposes? But the model itself is not censored. The scaffolding—the overall product served up to users in China—is censored, but the model itself is not.

Why would that be? I thought Zvi had a good analysis of this, where he basically said that you want a model to have a good, coherent worldview. If you force it to believe certain things that are false, you may find that creates tensions or other weirdness in the model's overall behavior that you don't want. Obviously, all these things are sort of black boxes and highly opaque; you don't know what depends on what.

Introducing these weird false beliefs probably has other performance costs. It is better to have a base model that works and has a coherent worldview, and then have another layer on top of that which does the moderation. They open-sourced R1, so you can go download it on Hugging Face. Hyperbolic has done that and set up a playground and an API. Many different companies have set up R1. So far, I have only seen Hyperbolic with R1-Zero, but you can do it.

That is interesting. I am not sure what is going on exactly in China with respect to governance, or how they are thinking about whether or not that should be okay. But I think, at a minimum, there is something interesting about the fact that it seems the cost of having your model itself try to internalize false beliefs or propaganda creates enough tension or conflict within the model's internal representations that it causes enough performance problems that it is just not something they wanted to do.

Maybe it is just that they do not want to deal with that. Maybe the performance problems are not really the thing, and it is just a question of convenience. But I think there probably is something to that. Certainly, when I interact with people, I notice that if you have foundational false beliefs, a lot of your other ideas and statements tend to suffer from that. So that could very well also be the case in models.

Okay, so that takes me through a lot of R1. What are the key takeaways? I think the fact that the simplest possible reinforcement-learning setup—where you just give the model problems and reward it for being right—works, and makes huge leaps in reasoning capability, is remarkable. You can kind of spin that process like a centrifuge.

In that respect, it is very similar to the Deliberative Alignment paper from OpenAI, where they basically say: Give us any policy, have the model do things with that policy in mind, then have another model come along and critique how well it followed the policy. Then we will just continue to train on its best examples until it gets good at following the policy. No human intervention is needed other than giving it the policy that you want to align it to; then you just spend compute to do it.

I think we have hit a point now where something like self-play, self-critique, or even just rewards from reality itself—based on whether you got the problems right or not—are enough to see significant takeoff. We are not used to seeing x-axes that are not log scales when it comes to these curves. The x-axis on the loss curves is really long; you are talking about orders of magnitude more compute to get a similar improvement.

So far, this is not like that. We are still in the steep part of the curve here, and that is pretty remarkable. It suggests there is a lot more to come from this.

On the small end, the distilled models—the smallest ones—can run on your laptop now. Depending on exactly what you want to run, you can now get 65% on GPQA Diamond with the distilled Llama 70B model. That is higher than o1-mini. It is lower than o1, which is at 75%, but GPT-4o is at 50%.

They are able to distill a 70B Llama to the point that it is significantly better than GPT-4o and about two-thirds of the way to o1. Their own DeepSeek-R1 is not quite as good as o1 on GPQA Diamond. This is an important benchmark: these are problems that PhDs in their fields can answer at roughly a 70% level.

We are now basically getting to the point where you have the ability to run, on your laptop, something that can answer PhD-level questions at roughly the same rate of accuracy. That is a big deal.

Definitely a big deal.

Amazingly, this was not the only paper that came out that day. What is going on in China? Are these guys coordinating? Were they, OpenAI, and Google trying to preempt each other? It is very unclear.

I will spend less time on the Kimi paper because we do not have the actual model available to try yet. Plenty of papers come out and say they got great benchmarks, but is the model itself actually great? We have seen this not just from Chinese companies; we have also seen it from Microsoft with its series of models. They are able to show really good benchmarks on certain things, but the model itself is not that great or useful. It is not really a helpful assistant.

That is not to take away from the work they are doing. They are interested in synthetic data, textbooks, and all the rest, but there is a big difference between making something that can score well on benchmarks and something that can both score well on benchmarks and be generally super useful.

I think it is worth spending at least a few minutes comparing and contrasting the overall approaches. There are a lot of differences at the detailed level, but the high-level approach and the overall vibe are very similar.

Again, they use a heavy dose of reinforcement learning in a pretty simple way. The behaviors they observe are a wide range of problem-solving behaviors. They say they have a “simplistic, effective RL framework” without relying on more complex techniques such as Monte Carlo tree search, value functions, and process-reward models.

They are specifically calling out that everybody has been talking about Monte Carlo tree search, but they did not find it necessary. Everybody has been talking about process-reward models, but they did not find those necessary in this case. They did not even have a value function, which, for the most part, they did not have in the DeepSeek paper either, although it is not called out quite as directly there.

A value function says which parts of the generation really mattered. I have talked about this in a couple of different episodes, and it is still something I do not understand as well as I would like to, to be totally honest.

When you do next-token prediction, you have a very simple signal: You either got the token right or you did not. The weights can be adjusted accordingly so that the model is a little more likely to get the right token next time.

When you are doing reinforcement learning, you do not have a token-by-token signal from the environment. In RLHF, the user says, “I prefer this one to that one,” or, “I give this one a score of 7 and this one a score of 5.” In the case of an accuracy reward, you are seeing that you got it right or got it wrong. In programming, you passed 8 out of 10 unit tests or 5 out of 10 unit tests.

But it is not telling you that this particular token was the one that was wrong. That is what value functions do: They try to assign value to the different parts of the generation, indicating that this was the place where you really got it right, or this was the place where you really got it wrong.

That way, you are not adjusting on the filler tokens that do not matter as much. You are focusing on the key forks in the road on your path to either getting it right or getting it wrong.

They do not use a value function here. They are just giving the model this high-level reward signal and letting its adjustments be what they may. They are not micromanaging the learning process for either of these models: no Monte Carlo tree search, no process reward model, and, here specifically, no value function either.

That is a really big deal.

They did not do pure reinforcement learning. There is no equivalent, at least in the paper, of R1-Zero in Kimi. There is no Kimi-Zero. They did something very similar, though, with what they call a warm-up dataset.

Again, you have this cold-start problem: How do we get the model to do roughly the right thing, in roughly the right way, with some of the problem-solving behaviors that we know work and that we will recognize as humans when we see them in action?

They created a dataset to demonstrate those behaviors and did supervised fine-tuning on it at first. They specifically noted behaviors such as planning, reflection, correction, evaluation, exploration, error identification, backtracking, and solution refinement. They mostly identified those up front, tried to create a small supervised-fine-tuning dataset that showed those skills in practice, initially trained the model on that, and then went into the reinforcement-learning phase.

Again, they showed that the chain of thought grows and grows and grows. Because they did not want it to get too long, they added another term to the reward: a simple length penalty. Basically, they want the model to be right, but they also want it to be right briefly, especially when the answer should be brief.

You may have seen funny examples such as, “What is 1 plus 1?” or, “What is 2 plus 2?” The model will think for 1,000 tokens if it is accustomed to thinking for 1,000 tokens, and it will go ahead and do that. But you do not really need that for such simple things.

Can you create a balance that keeps things concise when they can be concise? That is what the length penalty is meant to do.

They also experimented with different reward-model approaches. They tried 2 different versions. One is what they call a traditional reward model, which, instead of generating tokens, generates scores.

Often, they will use the same base model—the same core model—as both the policy model and the reward model. They train a slight variation of the reward model that, instead of generating tokens, generates scores. They will slice off the last couple of layers so that the decoder can generate different numerical scores as opposed to tokens.

They tried that, and then they also used what they call a chain-of-thought reward model. That basically means applying the reasoning model to the process of figuring out how well the model did. They found that the chain-of-thought reward model was much better than the traditional reward model.

This is similar to the Deliberative Alignment situation, where they use the model with the policy to evaluate how well the model did in terms of implementing the policy. They are finding that these reasoning models are quite effective as self-critics.

That is distinct from a value function. As far as I understand it, the chain-of-thought reward model is really just trying to say whether the model did a good job or not. It is not specifically going down to the level of saying, “This part was good, and this part was not good.”

They have a part in the paper where they talk about that. They basically assign high reward to parts that led to the right answer, and give low reward or even penalize things that were going in the wrong direction.

Their analysis is that, in order to do planning, reflection, correction, evaluation, exploration, error identification, backtracking, and solution refinement—in order to use these problem-solving techniques—you have to be willing to go down the wrong path, realize that you are going down the wrong path, and then eventually come back to the right path.

They did not want to penalize those behaviors or train them out of the model. They found that they were critical to the models' success. So the chain-of-thought reward model evaluates whether you ultimately did a good job, but it does not micromanage the process at the level of saying, “You could have done this logical step better.”

It just goes to show that there are different ways to make this work.

My big takeaway from the pair of papers is that you can do this with no supervised fine-tuning. You can have these reasoning behaviors take off in a pretty fast way with no supervised fine-tuning, or you can do it with supervised fine-tuning. You can do it with a reward that considers the chain of thought, or one that does not consider the chain of thought. You can have a length penalty, or you can have no length penalty.

You can use different algorithms. They do use different reinforcement-learning algorithms, but the differences do not seem to matter. They are both quite simple processes in the grand scheme of things, up to roughly an o1 level, and they came out on the same day.

It seems like we do have a growing and still-shared paradigm. One of my worries about us and Chinese AI development is that they might start to diverge in really important ways. If they become very different, it becomes harder to know whether they are seeing the same things we are seeing.

What if they are seeing faster progress than we are seeing, and we do not even know what they are doing? That could lead to a lot of worry and a lot of, “We better race forward, because we do not even know what they are doing.”

I have been worried about the chip ban and the general decoupling of Western and Chinese AI technology development for that reason. For now, it seems like that has not really happened.

What we have is the same paradigm at OpenAI and Google, almost certainly at Anthropic, although we have not seen direct evidence of it, and at DeepSeek and Moonshot AI. At least those 5 companies seem to be doing something similar, where reinforcement learning is getting models to think longer.

That seems to happen naturally. These problem-solving behaviors seem to arise pretty naturally, and nobody seems to think we are at the end of how far we can push that paradigm.

We know o3 is coming. The only thing I have seen about o3 that seems qualitatively different from what we have seen with R1, Kimi, and o1 is how much inference-time compute is being spent.

It seems like, with o3, there is something going on. I could be wrong about this, but it seems like there is something going on that is not just a single autoregressive rollout.

In the Kimi paper, they write: “The model still autoregressively samples language sequences during inference, thereby circumventing the need for complex parallelization required by advanced planning algorithms during deployment.”

What I think they are referring to in terms of complex parallelization is something more like Monte Carlo tree search, where you are branching paths, trying to evaluate which one is better, and continuing from there. AlphaGo did that kind of thing, and people have thought that maybe that was what Strawberry was doing, and what Ilya saw.

o1 seems to be doing the same thing: autoregressively rolling out language and doing all of its backtracking and problem-solving in a single generation. Gemini Flash Thinking seems to be doing that as well. These models are doing that.

o3 does seem to be doing something different, though. The ARC-AGI challenge results, and the fact that they were spending thousands of dollars but that it only took however many minutes to spend that much money, strongly suggest that the number of tokens they are generating per second is higher than could realistically be generated by a single autoregressive rollout.

It does seem like there is something going on with o3 where they have found some way to parallelize the computation and get the best result. We do not know what that way is. These papers are silent on that, too. They have not addressed it at all.

There is something there with o3 that is potentially a big deal, potentially a secret sauce.

For the moment, it could just be a question of voting. For math problems, you have simple things like trying it once or trying it 16 times and taking the most common answer. You do get better results if you do it 16 times and take the most common answer.

You could do that with ARC-AGI. It is a structured enough problem that you could do a huge number of generations and take the most common solution. Maybe that is it. Maybe they have some other algorithm that is aggregating these different rollouts.

One technique that I have seen recently and thought was quite interesting is called Smoothie. Basically, with this Smoothie technique, there is no ground truth, but you want the model's best answer.

They did a bunch of generations and used embeddings to convert all those generations into an embedding space. Then they did a statistical analysis to find what was the most central consensus. Even if there is not an outright consensus, if you are doing a creative-writing task, you can still identify which answer is the most central among all these other points in this high-dimensional space.

That is another interesting possibility for how these things could be working. Of course, it could be something else entirely.

Right now, if there is any gap—if the R1 curve is not bending—you can probably continue to make progress and maybe get to the low-effort o3 setting. I am not sure you can get to the high-effort setting, where you are spending thousands of dollars in just a handful of minutes, without some smart way to figure out which of those generations is the one you actually want to go with.

That remains an open question.

Nevertheless, reading through all of this, when Sam Altman, DeepMind leadership, and Dario Amodei say that the singularity is near, I think it is time to start taking them seriously.

It was all fun and games when it was GPT-2 and GPT-3: “Look, it can do some funny, creative stuff. Is scale amazing?” Even GPT-4 was getting into that human-intern level.

We are now at human-PhD level on small- to midsize tasks. The setup is still not that complicated. It is not as though there have been tons of intricate techniques developed. Simple stuff is working. Multiple different paths are working. It kind of all works.

Possibly we had to get over some threshold before this reinforcement-learning paradigm could kick in on top of language models. If so, it seems like we are there.

It definitely seems like we should expect meaningfully superhuman performance across a fast-growing range of domains. Math is for sure. Programming is for sure. We have already seen that o3 can get up into the top 200 coders in the world.

There is no shortage of ability to reward models for getting the right answers on coding problems. Developing the hard problems is going to be a challenge, perhaps, but the world itself generates a lot of coding problems all the time.

For math problems, we have FrontierMath. We have our best minds working on extending the curriculum into superhuman territory. I think that is going to extend to everything.

They are already showing that there is some generalization from reasoning tasks to other tasks. o1 is better at legal analysis, for example, than the base GPT-4o. We are seeing transfer from the hardest core reasoning to other things where reasoning is part, but not all, of what is important.

I think we are just going to continue to see that. It is hard to imagine that you are not going to be able to get enough reward signal in this process across a wider range of domains, to the point where we start to see meaningfully superhuman performance across a pretty wide range of tasks.

The models already have superhuman knowledge. That was true with GPT-3, and definitely with GPT-4. We have now given them at least weakly superhuman reasoning capabilities.

They are increasingly multimodal. That spans not just text and language, but all the other modalities we have covered on so many episodes of this podcast: protein folding, shape interactions, DNA sequences, what is important to the overall condition of a cell, predicting how brain states are going to evolve through time, predicting material properties, predicting weather forecasts, and predicting how to optimize shipping networks.

When models are trained on these specific modalities, it seems that they can develop a sort of intuitive physics in those different problem spaces that humans are not capable of, because our biological neural networks are just not that flexible.

Very few people can develop a deep intuition for how to optimize some of these far-out problems. As far as I know, nobody has ever been good at protein folding, but the models are very good at it.

You start to think, “Geez, the tale of the cognitive tape needs to be updated again.” The world knowledge is there. The reasoning is there. The ability to work natively in all these other modalities that are still so foreign to us is there.

There has recently been a big step forward—and we will have a podcast on this soon—with one of the authors of the Titans paper from Google. That is a notable step forward in memory.

The last super-long-monologue podcast I did might have been the Mamba one, from a little more than a year ago. That was a notable step forward in memory. It was about how we need to move past a finite context window. How can we do that?

We know that our brains have a finite size. They are not growing quadratically with our experience. Our memory is evolving and integrated in such a way that it is really useful to us. We know who we are, what we are trying to do, and what has happened to us in the past.

We do not tend to fall for the same tricks twice because we have this integrated memory that keeps track of the most salient things that have happened. Mamba and state-space models were a notable step toward that.

They showed that you can get similar performance from a finite-state, finite-size, non-growing state as you can from a Transformer. We have dug into the differences between their relative strengths and weaknesses on different micro-skills, and they complement one another.

The Titans paper is another step forward in terms of making that memory even more useful while still keeping it to a constant state.

My crystal ball is foggy a few months out, but at this point, you can look at all these different pieces and see a picture of AGI starting to emerge. It is not really speculative anymore. We can see the core components of it.

I do think we have to start taking seriously that there are different degrees of superhuman intelligence. There is the sort of godlike superintelligence that people sometimes imagine. There is also something as smart as the smartest human, but running faster. Then there is a range of space in between.

I do not have a clear picture of what truly superintelligent systems would look like, and I think most people do not either. When they imagine it, they just imagine something that magically solves problems and makes everything bend to its will. The mechanism is not very clear.

But if you scale that back to weakly superhuman intelligence, I think the path to that is increasingly quite clear. There are not too many missing pieces left. I think it is very credible when the leaders say we are looking at 1 to 3 years.

Dario is talking about AIs that are better than any human at every task in 2027. It is still really hard for me to imagine what the world is like when that happens, but it is increasingly not that hard to imagine what the AI is like that could satisfy that definition.

I think the singularity is, in fact, near.

We are going to do some more episodes on this. I hope to have Dean Ball talk about the strategic dynamics and the policy response, if there should be one. I also hope to talk to Jordan Schneider about what is going on in China.

I have a lot of questions there. What does this mean for moats and business interests? Are we back to a no-moat reality, or what?

I would say not exactly. These papers have shown methods in general terms. They have not shared all the data, and they have not shared every last detail. While DeepSeek has open-sourced the model, it is not the case that very many organizations could quickly pivot and do what DeepSeek is doing.

Creating the base model—the V3, with 671 billion parameters—is not easy. Then doing this additional work is not easy either. Even though the methods are not complicated, there is a lot of know-how, a lot of efficiency, and a lot of very good work happening at these Chinese companies.

I do not think this means you are going to see proliferation at the frontier. I do not think we are going to see many more entrants into the competition to be among the global leaders in frontier AI development.

I do think we are going to see more diffusion of this technology. We now have—and presumably there will never be another time in the future, barring some sort of collapse—an environment where you can get a reasoning model with PhD-level ability and run it on your laptop.

That is the new normal, and it will put pressure on various business models. I would not be surprised if we see an o1 price drop in the not-too-distant future.

Certainly, the level of undercutting that R1 is doing relative to o1 could put real pressure on OpenAI's business model. R1 is also faster. If I am coding and I can read the chain of thought, there are notable advantages to it.

If I am coding in Cursor, do I want to use o1 or do I want to use R1? If I am paying for the marginal tokens and sitting there waiting, I would honestly pretty often probably want to use R1.

I think this puts DeepSeek, at least, in the top tier globally. It creates pressure for Western companies' business models, but it does not mean that anybody can join the elite group of truly frontier developers.

I really do not know why DeepSeek is open-sourcing its models. I also do not know what the Chinese government is thinking about that. I have seen a wide range of analyses online, and I do not feel that any of them really stand out to me as particularly credible or as making a ton of sense.

One analysis I appreciate is that DeepSeek is not rushing to frame all of this as a race—or, God forbid, an AI war. They are pursuing this with a carefree attitude, trying to figure out the mystery of AGI. Their mission statement says something like, “Figure out AGI with curiosity,” and they are sharing their results.

It may be that we can take them at face value. Maybe they do not care that much about building a business, or they are confident they will have a better model soon and can always choose not to open-source that one.

It is harder to understand how the Chinese government is interpreting this. Did DeepSeek get sign-off before it did an open-source release like this? Has the Chinese government said that it is okay?

It does seem like the Chinese government is okay with the base model being uncensored, as long as the product that people actually use online is censored. But people can download the base models.

Maybe we should understand Chinese censorship as being less draconian than we used to think. Maybe they want to control the public square, but they do not really care what you think in the privacy of your own home, when you are talking to your own language model running on your own laptop.

I have even seen analysis suggesting that maybe the Chinese government is just sleeping on this and does not realize how important all of it is. That would be hard to believe if Western leaders have woken up to what is going on. We have seen $500 billion Stargate projects announced in the last couple of days, along with full-page ads saying nothing less than “AI war” in newsprint.

I do not think the Chinese government is missing that. I think they are aware of what is going on, and aware that this is strategic.

Are they playing a similar game where they are saying, “Let us be the good guys. Let us show that we are not a threat. Let us try to take the air out of the whole notion that this is some sort of AI arms race by showing that we are comfortable with who we are and that we can release our stuff”?

Maybe they are saying that they have the national capacity to build organizations that can perform at an elite level and join the global frontier, but they are not trying to hoard all that benefit for themselves. Maybe they are playing a sort of de-escalatory strategy here.

I really do not know, but I do want to understand that better. Hopefully, I will be able to have a couple of good conversations to illuminate it.

All this stuff was released in a friendly way. It seems to be a move toward de-escalation. If they had not open-sourced their methods or weights, and had said, “Look at what we did, and we are not going to tell you how,” that would definitely have been a ratcheting up of the general sense of competition and tension.

At a minimum, we can say that they did not do that.

What does this mean for policy? Not too long ago—it definitely goes to show that we are all updating often—if you are not updating your AI worldview often, that is almost surely a mistake. I feel like I may have overcorrected a time or 2, but you want to be updating.

Not too long ago, I thought, “Okay, if I am a compute-governance person, this seems to reinvigorate me.” The reasoning paradigm was getting expensive again, and the hardest problems were going to have to think for a long time and need huge resources.

Maybe your average rogue cannot conduct some devastating cyberattack or biological attack because they will only have so much computing power, whereas the establishment will have far more. People have said this about spam: We have spammers spamming us, but we have better, more powerful systems and can control it.

Maybe we could have a similar dynamic. That was my takeaway from o1.

This probably erodes that a bit. We are now back to there not being that big of a difference between what you have to pay huge amounts of money for and what you have the ability to run on a pretty good home laptop.

Is compute-based governance really going to hold? I do not know. It does not seem realistic. They trained the whole DeepSeek-V3 model on $6 million worth of compute. The reinforcement learning appears to have used less additional compute than the original pretraining, and it is more easily parallelizable.

You can do your problem-solving inference and spread that out, and training is also becoming something that can be run on a decentralized basis.

It does not seem realistic that we are going to be able to control compute well enough to prevent people from doing gain-of-function-type research wherever they want to do it. Can we get AIs to design some pathogen that kills certain cells at a certain rate? That rate is a signal. You can get an objective reinforcement-learning signal as long as you can get over the hump and obtain any reward.

Can we get compute under enough control that a huge number of research groups could not do all kinds of gain-of-function research with AIs? I do not see how. I think that is probably coming.

Should we try to prevent that? Should we try to stigmatize it? Should we create scary examples that show how it can go wrong and try to convince people that it is not something they should do on their own?

Maybe. But it does not seem like we are going to be able to control compute well enough to prevent that sort of thing from happening.

When it comes to China, what exactly are we trying to prevent them from doing? At this point, it does not seem like any of the measures that the United States has taken to restrict compute are preventing Chinese companies from being right there with our best companies at the frontier.

Maybe in the future these things will start to be a greater constraint. Presumably they will. But $6 million is not a lot of compute, and, if anything, it seems like less additional compute was spent on the reinforcement learning than on the original pretraining.

What are we trying to prevent China from doing with AI right now? They are doing everything we are doing. Being on the same technology tree still seems good to me.

The fact that they are sharing what they are doing in terms of general methods and the model weights themselves seems very friendly. Do we not want AI to diffuse through the Chinese economy just as we want AI to diffuse through our economy, so that everybody has a world of abundant expertise and potentially material abundance not too far from now?

I thought we all wanted that. I am just confused about what we think we are doing, because it does not seem to be working.

You could say that we do not want them to develop military applications, or whatever. But framing it as an AI war, framing chips as the new oil, and cutting them off from chips does not seem like a good way to discourage them from militarizing their AI.

I also think they are going to have plenty of chips for their military. They can make phones, and they can do this stuff on $6 million of compute. It does not seem like there is any realistic path to cutting off chips so badly that they cannot do the research or make the military applications if they are determined to do that.

What we might end up doing is making chips scarce enough that military applications are all they choose to do. You could imagine a scenario where they can do their research and military applications, but they cannot provide support to all the small businesses across the country.

I just do not see why we would want that in the first place. I think there is plenty for Chinese small businesses and Chinese individuals to take advantage of with AI, without us needing to frame all of this as a big rivalry.

I do think we are smart to build our own data centers. I do not want to be beholden to China either. We should build our own data centers, and we should build our domestic chip-manufacturing capacity.

Those things do make sense, and it is going to take many billions to get there. $500 billion probably is not crazy, given all the AI that people are going to want to run.

What are we trying to prevent China from doing? They certainly seem to be doing an awful lot right now. These are the best open-source models in the world. They have surpassed Llama. I am sure Llama and Meta will have an answer, but right now the best open-source models in the world have come from China.

The best research publications, at least those explaining how these reasoning models work, have come from China. We are cutting them off from chips, and they are open-sourcing their research and models. Strange times. Something does not make a ton of sense there.

I guess there is one final caveat. People have noted that when you ask DeepSeek, “Who trained you?” it does tend to say OpenAI. I do not have an example of that in front of me right now.

Some people have said that just means they are training on OpenAI output. I would bet strongly against that. The fact that OpenAI showed that something could work definitely inspires others to go in that direction, and I would not deny that as a factor.

The fact that it says it was trained by OpenAI is more a reflection of background data contamination and being on the internet a lot. They have not done nearly as much sanding down of the rough edges of their models as OpenAI and Anthropic have in the West.

You can see that in the dynamic as well. This does not sound like corporate speak. You can see the shoggoth behind the behavioral training. That is my best interpretation.

They do not even have access to o1's chain of thought unless somehow it was stolen, but that is not the vibe I get from this. I think this is good research that has this weird quirk of the model saying that it was trained by OpenAI because of other issues.

There is a clear mechanism by which that could happen. They just did not clean it up, and that is probably a to-do-list item for them in the future. Or maybe they just do not care.

What we understand from DeepSeek is that its mission is to solve the mysteries of AGI. Maybe they do not care that it says it was trained by OpenAI.

The West still has a little lead. Cycle times are going down, and the lead is not very long in terms of time. Any strategy for getting to a good AI future that depends on the West—the good guys—having some insurmountable lead is not a great strategy.

I never thought it was a great strategy, but it is predicated on the lead actually existing, and that lead is pretty small. I appreciate the Chinese companies for sharing what they have.

We are going to see a lot of weird stuff downstream from this. I hope to have a couple of additional conversations to go deeper on the strategic dynamics and the policy, but hopefully this was at least a good walkthrough of the actual research and the resulting models.

I do think that is really important to get grounded.

Erik Torenberg

Go to chat.deepseek.com—use it. When the Kimi reasoning model comes out, use that, too, if you really want to be an explorer and do cutting-edge stuff that not too many people are going to do, where you have a chance to find something that matters. Use R1, too.

I think this is the first time that I've seen a model, since the original GPT-4 early access that I was able to test two and a half years ago, that merits the same level of “drop everything and just immerse yourself in this model” and really try to understand it, both on R1 and R1-Zero. I'm sure that there's a lot more to discover there, and it just dropped. Anybody listening to this, if you've made it far into this podcast, go do that. I think you will learn and discover, and we will all be better off for it.