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. Chapters: 00:00 Introduction 01:03 Chapter 1: Distill and conquer 06:47 Chapter 2: A new open-source era 10:05 Chapter 3: AGI at all costs 12:47 Chapter 4: Glean CEO interview 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 Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Want to earn some extra money on the side? Take CNBC’s new online course How to Start a Side Hustle to learn tips to get started and strategies for success from top side hustle experts. Pre-register now and use coupon code EARLYBIRD for an introductory discount of 30% off $97 (+taxes and fees) through April 1, 2025: https://cnb.cx/4gPqi2y Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC on Threads: https://cnb.cx/threads Follow CNBC News on X: https://cnb.cx/FollowCNBC Follow CNBC on WhatsApp: https://cnb.cx/WhatsAppCNBC #CNBC #AI #DeepSeek #OpenAI What Is AI Distillation — And How DeepSeek Used It To Blindside OpenAI