The Chinese AI model DeepSeek has very quickly become one of the most downloaded apps and attracted a lot of attention in the tech industry. Its unexpected success has not only surprised investors but also affected the market capitalization of several major tech companies.
DeepSeek is an AI-powered chatbot and language model that works in a similar way to OpenAI’s ChatGPT. It is used to generate text, answer questions, and help users with tasks such as coding and mathematical calculations. The model has been compared to OpenAI’s o1 and is considered an advanced reasoning model, allowing it to process complex questions and provide multi-stage answers.
One of the most notable aspects of the chatbot is its low development cost. While OpenAI’s GPT-4 was said to have cost over $100 million to train, DeepSeek claims that their model only required $6 million. This has been made possible by a combination of advanced memory management and the efficient use of less powerful chips, making the model both cheaper and more resource efficient.
DeepSeek is not just a technological innovation, however, but also part of China’s larger strategy to reduce its dependence on Western technology. The company has managed to build a powerful AI model despite an export ban on high-end semiconductor chips from the US.
Major drop for Nvidia
The chatbot’s rapid impact has had immediate effects on the tech market. Among other things, the model has shown that advanced AI solutions can be developed without access to the most powerful chips, which has created uncertainty in the market about the need for expensive semiconductors.
The biggest stock market impact has been seen in Nvidia, the world’s leading chip maker, whose share value fell by $600 billion – the biggest one-day loss in US history. The market has reacted sharply to the realization that cheaper AI models can compete with the most advanced alternatives.
At the same time, DeepSeek, like other AI models, has also raised questions about security and data privacy. Some experts argue that the model, like other AI platforms, may be subject to government censorship and restrictions and that DeepSeek is programmed to provide “helpful and harmless” answers.
Trump: “A wake-up call”
DeepSeek’s success has led to widespread reactions from both businesses and governments. Donald Trump called the launch a “wake-up call” for US companies and said it is now crucial for the US to “compete to win” in AI development. Australia’s science minister, Ed Husic, expressed concerns about DeepSek’s handling of data and security.
In China, the language model is being hailed as proof of the country’s technological progress and independence from Western technology. President Xi Jinping has previously emphasized AI as a national priority, and its success is seen as a step towards establishing China as a global leader in artificial intelligence.
The AI model has also faced technological challenges. On the day of its major breakthrough, the platform was attacked, according to the company, by a “large-scale malicious attacks” that led to temporary outages and restrictions on registrations. Even at the time of writing, DeepSeek is suffering from server issues and disruptions.