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AI Firms Follow DeepSeek’s Lead, Create Cheaper Models with “Distillation”

Linda Torries – Tech Writer & Digital Trends Analyst by Linda Torries – Tech Writer & Digital Trends Analyst
March 4, 2025
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AI Firms Follow DeepSeek’s Lead, Create Cheaper Models with “Distillation”
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The Rise of Distilled AI Models: A Game-Changer for Developers and Businesses

What are Distilled AI Models?

Thanks to distillation, developers and businesses can access the capabilities of large language models at a fraction of the price. This allows app developers to run AI models quickly on devices such as laptops and smartphones.

How are Distilled AI Models Used?

Developers can use OpenAI’s platform for distillation, learning from the large language models that underpin products like ChatGPT. OpenAI’s largest backer, Microsoft, used GPT-4 to distill its small language family of models Phi as part of a commercial partnership after investing nearly $14 billion into the company.

A New Challenge for AI Firms

However, the San Francisco-based start-up has said it believes DeepSeek distilled OpenAI’s models to train its competitor, a move that would be against its terms of service. DeepSeek has not commented on the claims.

The Limitations of Distilled AI Models

While distillation can be used to create high-performing models, experts add they are more limited. "Distillation presents an interesting trade-off; if you make the models smaller, you inevitably reduce their capability," said Ahmed Awadallah of Microsoft Research.

The Benefits of Distilled AI Models

David Cox, vice-president for AI models at IBM Research, said most businesses do not need a massive model to run their products, and distilled ones are powerful enough for purposes such as customer service chatbots or running on smaller devices like phones.

Conclusion

Distilled AI models present a challenge to many of the business models of leading AI firms. However, they offer a more affordable and efficient way for developers and businesses to access AI capabilities. As the technology continues to evolve, it will be interesting to see how AI firms adapt to this new reality.

FAQs

  • What is distillation in AI?
    Distillation is a process that allows developers to create smaller models that can perform specific tasks, reducing the need for large and complex models.
  • How do distilled AI models work?
    Distilled AI models are created by training a smaller model on a specific dataset, allowing it to learn and adapt quickly.
  • Are distilled AI models limited?
    Yes, distilled AI models are more limited in their capabilities compared to larger models. However, they are powerful enough for specific tasks and can be used on smaller devices like phones.
  • How do AI firms make money from distilled AI models?
    AI firms often charge less for the use of distilled models, as they require less computational load.
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Linda Torries – Tech Writer & Digital Trends Analyst

Linda Torries – Tech Writer & Digital Trends Analyst

Linda Torries is a skilled technology writer with a passion for exploring the latest innovations in the digital world. With years of experience in tech journalism, she has written insightful articles on topics such as artificial intelligence, cybersecurity, software development, and consumer electronics. Her writing style is clear, engaging, and informative, making complex tech concepts accessible to a wide audience. Linda stays ahead of industry trends, providing readers with up-to-date analysis and expert opinions on emerging technologies. When she's not writing, she enjoys testing new gadgets, reviewing apps, and sharing practical tech tips to help users navigate the fast-paced digital landscape.

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