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What Is AI Distillation — And How DeepSeek Used It To Blindside OpenAI

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February 21, 2025

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Silicon Valley is now reckoning with a technique in AI development that could upend the leaderboard. Distillation is the idea that a small team with virtually no resources can make an advanced AI model by extracting knowledge from a larger one. While the Chinese AI startup DeepSeek didn’t invent the method, its use of the technique roiled the stock market and woke the AI world up to its disruptive potential. Distillation is now enabling less-capitalized startups and research labs to compete at the cutting edge faster than ever before. DeepSeek’s breakthroughs also ushered in the rise of a new open-source order, based on a belief that transparency and accessibility drive innovation faster than closed-door research. That combination -- distillation’s newfound traction and open-source’s rise in popularity -- is deadly for the competitive edges that the biggest AI players had. This video also includes Bosa’s full interview with Glean CEO Arvind Jain.

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Anchor: Deirdre Bosa

Produced by: Jasmine Wu, Drew Troast, Laura Batchelor

Edited by: Lisa Setyon

Senior Director: Jeniece Pettitt

Animators: Jason Reginato, Christina Locopo

Editorial Support: Erin Black

Additional Footage: Getty Images

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What Is AI Distillation — And How DeepSeek Used It To Blindside OpenAI

Guests & Subjects Covered

And How DeepSeek Used It To Blindside OpenAISilicon ValleyChinese AIGlean CEOAnchor Deirdre Bosa ProducedReality TVTake CNBCsSide Hustle

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