A Chinese AI startup, DeepSeek, has recently come into the headlines and captured the attention of people worldwide. It surpassed OpenAI’s ChatGPT and became the most downloaded free app in the US on Apple’s App Store.
China’s DeepSeek AI is powered by the open-source models. As per the company’s claims, these models can be trained at a fraction of the cost through fewer chips than the world’s top-notch models. This statement has affected the financial markets, with Nvidia’s share price dropping more than 12% in pre-marketing trading.
The downloads of the application exploded as soon as DeepSeek released its new R1 reasoning model, designed to resolve difficult problems and perform on OpenAI’s 01 on several benchmarks, on 20th January.
DeepSeek has been developed with a modest budget of around $5.5-6 million as compared to OPenAI’s models costing tens of millions. The notable features and pricing structure of DeepSeek are capturing widespread attention.
The affordability and open-source approach make DeepSeek stand out. This model is completely open-source, enabling users to easily download the app for free and run it locally without sharing any data.
A Quick Brief of DeepSeek
Lian Wenfeng, a hedge fund manager, established DeepSeek in 2023. Within two of its establishments, the nascent AI captured a lot of attention this month after its R1 model was released. This model is as efficient as OpenAI as per the Artifical Analysis Quality Index.
Alexandr Wang, the CEO of Scale AI, said that the leading Chinese AI lab, Deep Seek, has the top-notch model and is on par with the best US model.
R1 is DeepSeek’s open-source, which means any AI development can access it, use it, modify it, and improve it. It can even learn and improve without human involvement. This model is excellent at chain of thought reasoning, a process that breaks down a tough task into logical steps.
The Impact of China’s DeepSeek
DeepSeek’s sudden emergence has generated a palpable sense of urgency among the business leaders and entrepreneurs in Silicon Valley. Numerous memes poking fun at OpenAI’s perceived fall from grace are on trend. Even US President Donald Trump gave a statement saying a ‘wake-up call’ for US businesses. As Chinese technologies reach the top, questions are emerging about the future dynamics of the AI landscape.
Also, for most users, those who were not willing to pay $20 to avail of the premium services in ChatGPT, DeepSeek offers a cost-effective alternative. The upcoming months will reveal whether the rise of DeepSeek is a long-term shift in the AI segment or just a temporary shakeup.
Experts are keeping a close eye on the implications of DeepSeek. The open-source feature of the application invites bigger collaboration and potential enhancements from the development community worldwide.
Analysts believe that those open research models will give a new direction to how AI is created and deployed and set new industry standards for collaboration.
As DeepSeek is gaining traction, the AI community is attentive to its evolution. The upcoming scenario underscores the dynamic nature of tech advancements and notable transformations in market leadership. DeepSeek made significant growth; it showcases the increasing impact of Chinese tech brands in the global landscape and is a reminder of the ever-evolving nature of AI development.
The Significant Challenges and Limitations
The emergence of DeepSeek has been remarkable. However, it is not without drawbacks. As a China-based AI, the platform faces censorship on sensitive topics, including the Tiananmen Square protests. When the questions are banned on the subjects, it results in the chatbot redirecting users to the other topics.
OpenAI, Nvidia, Microsoft, and Meta are actively investing billions into AI data centers—$500 billion alone for the Stargate Project. Amid it, $100 billion is thought to be earmarked for Nvidia. Analysts Microsoft and other companies with substantial stakes in managing the AI status quo are all trending downward in pre-market trading.