DeepSeek has emerged as a leading AI application, raising questions about the future of the industry and US competition.
**DeepSeek's Rise: The Low-Cost Chinese Chatbot Disrupting the AI Landscape**
**DeepSeek's Rise: The Low-Cost Chinese Chatbot Disrupting the AI Landscape**
Chinese chatbot DeepSeek climbs to the top, challenging American AI dominance.
The article text:
DeepSeek, a Chinese artificial intelligence (AI) application, is making headlines and shaking up the global AI landscape as it surpasses popular platforms like ChatGPT on Apple's App Store in the US, UK, and China. Launched in January, this free app's skyrocketing popularity has defied expectations surrounding America's dominance in the sector.
Key to DeepSeek's success is its use of the open-source DeepSeek-V3 model, developed at a fraction of the cost of its competitors, approximately $6 million, this is substantially less than the billions invested by rival companies. However, that figure has faced skepticism from other players in the AI realm.
The recent launch of DeepSeek-R1 has further intensified attention on the app, with claims of performance that rivals OpenAI's latest offerings in areas like mathematics, programming, and natural language processing. Marc Andreessen, a Silicon Valley venture capitalist, has referred to this moment as "AI's Sputnik moment," drawing a parallel to the historic launch of the Soviet Union's first artificial satellite in 1957.
Currently, advanced semiconductors play a crucial role in training AI models like ChatGPT. Since 2021, US government restrictions on chip exports to China have prompted local developers to collaborate and innovate new methodologies to overcome supply shortages. Consequently, they have created AI models that not only require less computational power but also come with significantly lower price tags, potentially transforming the industry's future.
This surge has impacted stock values of US technology firms, resulting in declines for companies like Nvidia, Microsoft, and Meta. European stocks were similarly affected, with ASML, a key Dutch chip equipment maker, dropping over 10%, and Siemens Energy falling 21%. Fiona Cincotta, a senior market analyst, noted that the unexpected emergence of a low-cost AI alternative could jeopardize profits for established players, especially in light of their substantial investments in infrastructure.
Experts have expressed concerns that DeepSeek's affordability could disrupt the broader AI supply chain. On Wall Street, Citi analysts cautioned against underestimating the barriers that Chinese firms face, suggesting that, despite potential competition, US access to advanced chips remains an advantage.
DeepSeek was founded in 2023 by Liang Wenfeng in Hangzhou, China. A graduate in information and electronic engineering, Liang also established the hedge fund that financed DeepSeek. Reports indicate that he acquired a significant stockpile of Nvidia A100 chips, now banned from export to China, enhancing the launch of DeepSeek by combining those chips with more affordable alternatives. Liang recently participated in talks with Chinese Premier Li Qiang, revealing in a July interview that he underestimated the sensitivity of pricing in AI technology.
As the AI race evolves, both the achievements and hurdles of alternatives like DeepSeek will shape the industry's landscape.
DeepSeek, a Chinese artificial intelligence (AI) application, is making headlines and shaking up the global AI landscape as it surpasses popular platforms like ChatGPT on Apple's App Store in the US, UK, and China. Launched in January, this free app's skyrocketing popularity has defied expectations surrounding America's dominance in the sector.
Key to DeepSeek's success is its use of the open-source DeepSeek-V3 model, developed at a fraction of the cost of its competitors, approximately $6 million, this is substantially less than the billions invested by rival companies. However, that figure has faced skepticism from other players in the AI realm.
The recent launch of DeepSeek-R1 has further intensified attention on the app, with claims of performance that rivals OpenAI's latest offerings in areas like mathematics, programming, and natural language processing. Marc Andreessen, a Silicon Valley venture capitalist, has referred to this moment as "AI's Sputnik moment," drawing a parallel to the historic launch of the Soviet Union's first artificial satellite in 1957.
Currently, advanced semiconductors play a crucial role in training AI models like ChatGPT. Since 2021, US government restrictions on chip exports to China have prompted local developers to collaborate and innovate new methodologies to overcome supply shortages. Consequently, they have created AI models that not only require less computational power but also come with significantly lower price tags, potentially transforming the industry's future.
This surge has impacted stock values of US technology firms, resulting in declines for companies like Nvidia, Microsoft, and Meta. European stocks were similarly affected, with ASML, a key Dutch chip equipment maker, dropping over 10%, and Siemens Energy falling 21%. Fiona Cincotta, a senior market analyst, noted that the unexpected emergence of a low-cost AI alternative could jeopardize profits for established players, especially in light of their substantial investments in infrastructure.
Experts have expressed concerns that DeepSeek's affordability could disrupt the broader AI supply chain. On Wall Street, Citi analysts cautioned against underestimating the barriers that Chinese firms face, suggesting that, despite potential competition, US access to advanced chips remains an advantage.
DeepSeek was founded in 2023 by Liang Wenfeng in Hangzhou, China. A graduate in information and electronic engineering, Liang also established the hedge fund that financed DeepSeek. Reports indicate that he acquired a significant stockpile of Nvidia A100 chips, now banned from export to China, enhancing the launch of DeepSeek by combining those chips with more affordable alternatives. Liang recently participated in talks with Chinese Premier Li Qiang, revealing in a July interview that he underestimated the sensitivity of pricing in AI technology.
As the AI race evolves, both the achievements and hurdles of alternatives like DeepSeek will shape the industry's landscape.
