DeepSeek, a new AI model from China, has quickly emerged as one of the world's most talked-about technologies. The model, released on January 20, quickly rose to the top of the Apple App Store, surprising both AI experts and investors. Its impact has been felt across global tech markets, prompting Nvidia's stock to fall by $600 billion daily, the worst loss in US stock market history.
What makes DeepSeek so unique? It is believed to be as powerful as OpenAI's top models but at a far lower cost. This development has fuelled debate over China's technology ambitions and whether the United States can maintain its AI superiority.
What is Artificial Intelligence (AI)?
Artificial intelligence (AI) is a technology that enables machines to think and learn like humans. It allows computers to handle enormous amounts of data, identify patterns, and provide replies.
Modern AI, particularly generative AI, drives chatbots such as ChatGPT and DeepSeek, enabling them to generate text, graphics, and even code. These algorithms are trained on large datasets to react intuitively to human questions.
What is DeepSeek?
DeepSeek, a Chinese-made AI chatbot, operates similarly to ChatGPT. It can answer queries, assist with coding, and even solve complex problems.
How is DeepSeek Different from Other AI Models?
It uses less advanced chips, which makes it cheaper to operate.
provides performance comparable to OpenAI's o1 model.
Avoids politically sensitive issues, consistent with China's censorship rules.
DeepSeek is regarded as a formidable rival in the AI race, and its performance has astounded even the most experienced AI researchers.
How Did DeepSeek Become Popular?
DeepSeek's popularity skyrocketed following its latest release on January 20, 2025. It immediately became the most popular free software on Apple's software Store, outpacing numerous well-known apps.
Its rise was recognized not just by tech experts, but also by US President Donald Trump, who dubbed it a "wake-up call" for American companies.
Why is DeepSeek Unique?
The most remarkable thing about DeepSeek is its cost efficiency.
1. Low-Cost Development
OpenAI's GPT-4 reportedly cost more than $100 million to create.
DeepSeek's creators claim they trained their model for only $6 million.
2. Smart Use of Chips
DeepSeek was built with a combination of Nvidia A100 chips and lower-cost alternatives, demonstrating that cutting-edge AI may be developed without relying entirely on high-end technology.
Impact on the Tech Industry
DeepSeek’s Effect on OpenAI and Other AI Companies
DeepSeek's efficiency calls into question the notion that only large expenditures and powerful hardware can produce top-tier AI models.
Investors are already questioning if OpenAI and other AI behemoths can sustain their competitive advantage.
The Nvidia Stock Crash
DeepSeek's performance has generated concerns that firms may no longer require pricey Nvidia CPUs.
Nvidia's stock price dropped 17% in a single day, erasing $600 billion in market value.
DeepSeek and US-China Tech Rivalry
Washington has prohibited the shipment of advanced AI processors to China to impede its AI advancement. However, DeepSeek's revelation indicates that China has discovered a way around these prohibitions.
President Xi Jinping has made artificial intelligence a national priority, and China is fast turning away from traditional industries and towards high-tech fields such as AI and electric vehicles.
Challenges and Controversies
Despite its success, DeepSeek faces several challenges:
1. Censorship in China
DeepSeek, like other Chinese AI models, avoids discussing Tiananmen Square and political unrest.
While this makes it acceptable in China, it reduces its global appeal.
2. Security Concerns
Some governments are concerned that DeepSeek may collect user data.
Australia's science minister has cautioned about the privacy hazards linked with Chinese AI models.
Who is Behind DeepSeek?
Liang Wenfeng founded DeepSeek in December 2023.
Unlike other AI entrepreneurs, Liang has experience in finance and quantitative trading.
He argues that China must shift from following Western AI trends to leading them.
His hedge fund, High-Flyer, was China's first to raise more than 100 billion yuan ($13 million).
Future of DeepSeek and Global AI Competition
DeepSeek has previously demonstrated that AI innovation does not require a limitless budget.
Will DeepSeek expand beyond China? It remains to be seen. But one thing is certain: the AI race has changed forever.
Conclusion
DeepSeek's emergence represents a watershed moment in AI development. It has upended financial markets, challenged tech behemoths, and transformed the worldwide AI landscape. As China strives for technical independence, DeepSeek might mark the start of a new AI era.
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