The artificial intelligence (AI) landscape is constantly evolving, with new players emerging and challenging the established giants. One such contender is DeepSeek, a Chinese AI startup making waves with its innovative approach to large language models (LLMs). But what exactly is DeepSeek, and why is it causing such a stir in the tech world?
DeepSeek is a free AI-powered chatbot developed by a Chinese startup of the same name. Launched in January 2025, DeepSeek R1, the company's latest model, is designed to rival the capabilities of OpenAI's ChatGPT while significantly reducing development costs. Like ChatGPT, DeepSeek can be used for a variety of tasks, including:
DeepSeek is a "reasoning" model which responds incrementally, simulating how humans think through problems or ideas.
One of the most remarkable aspects of DeepSeek is its cost-effectiveness. Researchers claim that DeepSeek was trained for $6 million, a fraction of the "over $100 million" hinted at by OpenAI CEO Sam Altman regarding the training of GPT-4. DeepSeek's founder, Liang Wenfeng, was able to circumvent US restrictions on powerful chips reaching China by building up a store of Nvidia A100 chips before the September 2022 ban. Some experts believe he combined these chips with less advanced, cheaper alternatives, resulting in an efficient and cost-effective process.
Furthermore, DeepSeek uses less memory than its competitors, which further reduces the cost of performing tasks for users.
The combination of high performance and low cost has propelled DeepSeek to the top of app download charts. However, its success has also triggered concerns among investors, leading to a significant drop in the market value of chip giant Nvidia. This is due to the way DeepSeek undercuts the long-held belief that bigger budgets and top-tier chips determine AI advancement.
The impact of DeepSeek's emergence can be summarized as follows:
DeepSeek's rise is also viewed as a boost for the Chinese government's efforts to achieve technological independence. Chinese state media has highlighted DeepSeek's success as a testament to the country's growing technological prowess and self-reliance.
However, DeepSeek has also faced scrutiny from global leaders. Australia has banned the app on government devices and systems due to national security concerns. Data protection authorities around the world have also requested clarification on how DeepSeek handles personal information, which is stored on China-based servers. Italy blocked DeepSeek's app on January 30 and ordered the company to stop processing the personal information of its citizens. DeepSeek is also trained to avoid answering politically sensitive questions.
Liang Wenfeng argues that China's AI sector "cannot remain a follower forever" of US AI development. DeepSeek aims to be an innovator, and its success has surprised many in Silicon Valley. DeepSeek has demonstrated that alternative approaches to AI development can yield impressive results, paving the way for a more diverse and competitive AI landscape.
As the AI race continues to intensify, DeepSeek's emergence is a clear sign that innovation can come from anywhere. Whether it can maintain its momentum and overcome the challenges it faces remains to be seen, but one thing is certain: DeepSeek has already made a significant impact on the world of AI.
