Will DeepSeek’s ‘Sputnik Moment’ Change Legal AI?

If you’ve not heard, there’s a new genAI in town: DeepSeek, a Chinese company that just dropped its open-source DeepSeek R-1 model, which is free, super-performant, and has triggered a panic among some AI investors because of its economic advantages. Will it also impact the world of legal AI? Send in your views, comments will be added as they come in (see below).

So, why is this a big deal? The company confidently states: ‘DeepSeek-R1 achieves performance comparable to OpenAI-o1 across math, code, and reasoning tasks.’ And presumably, this will only get better.

Videos of what it can do are drenching social media and it’s indeed quite impressive. One video shows a single line prompt asking it to build a ‘space invaders game’. It thinks for a bit, then lists multiple lines of text which explain exactly what it will need to, then it moves into the coding, then it provides the game – which works….and all from one single line of text prompt.

AL has not tested it on legal text, but is collecting views on its impact (see below).

But, first, why does it matter? Well, the BBC reports that DeepSeek ‘researchers claim it was developed for less than $6m’. They’ve also had to develop their LLMs without as much access to the best AI chips – given the US limits on tech exports to China. And that’s what’s shocked some people.

I.e. if DeepSeek can make something as good as some of the best LLMs in the US, which have had billions of dollars thrown at them, and need plenty of expensive tech to support them……..then do you need those companies and all that investment to get good results? And if you don’t….what then….?

This success has therefore created shockwaves in the West, and legendary investor Marc Andreessen has described DeepSeek R-1 as ‘AI’s Sputnik moment’. I.e. like when the Soviets put a man in space, years ahead of the Americans.

It has also led to stock sell offs of some tech companies and generally made a lot of people who assumed the US was miles ahead with genAI to freak out.

But, will it impact legal genAI….?

AL sent out some questions and will post the responses here as they come in. First in is Jim Wagner, CEO of TheContractNework:

  • Given the apparent free nature of DeepSeek, and its capabilities, will this have an impact on the emerging legal genAI world? 

Yes, if for no other reason than it will materially impact pricing options for other frontier models. More importantly, it shows a path forward for relatively low budget and fast training of new models on par with the very best models available today.

  • Will the fact that this is a Chinese company be a barrier to use?

It will be a factor until it’s not, then you will see rapid adoption, particularly among the startup community. It’s also worth noting that a handful of commentators have expressed concern about their terms of use and data ownership, but my guess is that’s a bit of a red herring.

The fact that major tech leaders, including Marc Andreessen, are already on the bandwagon tells me that this the real deal and it’s a harbinger of what’s to come … lots of fast followers who now know the tricks to get these things built on a budget.

  • Have you had a go, and if so is it ‘better’ than other LLMs?

Yes, I’ve had a go, but only through my personal accounts. It’s not so much that it’s better, it’s that it’s very good… probably good enough for 90% or more of what most people need.

Daniel Lewis, CEO, LegalOn, had this to say:

‘I’m tracking the DeepSeek news. We haven’t tried it yet but reports are that it is not better than other leading models, but is cheaper. We would be very cautious about using Chinese company technology given the often invisible connections to the CCP.

‘DeepSeek by itself to me is not an end point that changes legal tech, more an example that there will be multiple ways in which these models can be trained and the cost curve will be brought down. It seems to be a contradiction to the massive Stargate investments announced recently.’

Tim Pullan, Founder of ThoughtRiver, said it could have a big impact because of its low costs….but it’s rather a bit too chatty…

‘If DeepSeek’s claims about compute cost for training are proven to be true, then inevitably this will impact legal tech by putting additional downward pressure on all legal AI products, possibly resulting in some going out of business.

‘I have briefly tried it on a question about regulatory requirements and processes, it was definitely impressive, although I found the output from Perplexity for the same question pithier and easier to validate. DeepSeek has a slightly annoying chatty approach.’

(More to follow tomorrow.)