DeepSeek is a new artificial intelligence chatbot that’s sending shock waves through Wall Street, Silicon Valley and Washington.
The app, name after the Chinese start-up that built it, rocketed to the top of Apple’s App Store in the United States over the weekend.
According to some experts, DeepSeek’s success and a technical paper it published last week suggest that Chinese AI developers can match their US counterparts without the same access to expensive, high-end hardware that is at the heart of geopolitical tensions between Washington and Beijing.
Here’s what you should know about the DeepSeek AI assistant app and the company behind it.
What is DeepSeek?
DeepSeek is a Chinese artificial intelligence start-up founded in 2023 by Liang Wenfeng, co-founder of the hedge fund High-Flyer, which uses AI algorithms to predict market swings. The company claims its AI software is competitive with that made by US tech giants such as OpenAI and Google on a variety of tasks - at a fraction of the cost to develop and run.
Read more: DeepSeek AI model sends shockwaves through US tech firms as stocks plunge
Consumers are interested in DeepSeek’s technology. Its AI assistant app that was released earlier this month has shot to the top spot in the Apple App Store in the US and other countries.
DeepSeek’s surging popularity caused a sell-off of tech company shares Monday. Leading AI chipmaker Nvidia saw its stock price fall nearly 17%, though the company is still the world’s third-most-valuable company.
Last week, DeepSeek published the technical infrastructure underpinning the AI model behind its app, DeepSeek-R1. It claims costs savings from using far fewer and less advanced computer chips than advanced AI projects usually do.
That pushes back on core assumption of US AI companies and policymakers: that the best AI demands hugely expensive and advanced semiconductors. This idea led the Biden administration to ban US companies from exporting powerful AI chips to China, with the aim of slowing down the country’s tech industry.
How does DeepSeek work?
The app’s interface is similar to competitors such as ChatGPT, letting you type any question or request, then replying with conversational responses, though it does not yet generate images. The app is currently available on iOS and Android devices at no charge, so anyone who wants to test it out can try, though it has been limiting new sign-ups.
Like other AI models, the one powering the DeepSeek app can process and sift through huge amounts of data to identify patterns, make predictions and solve problems. The model is trained on data up to July, so it doesn’t know about more recent events, but a search option can scan more up-to-date information and headlines.
Is it safe to use?
As with most apps, DeepSeek can collect and store a massive amount of personal information, including any conversations you have and technical information about things such as your device and internet connection. That data could be accessed by the Chinese government, which has broad powers to intervene with corporations.
The app also appears to be censoring certain information in line with China’s strict internet controls, such as any mentions of the 1989 Tiananmen Square protests. Because DeepSeek has released a version of its AI model for others to use and modify, outside developers can make it both more secure and less restricted by running it locally on a powerful enough device.
How did DeepSeek do it?
DeepSeek claims it managed to develop its technology while using less advanced chips than its US competitors. That could be big news for China’s government and tech industry, as US policymakers attempt to constrain the country’s AI development.
The Biden administration has in recent years implemented sweeping restrictions on exports of powerful chips such as semiconductors and graphics processing units, or GPUs, in an effort to slow China’s development of AI and help maintain the lead US companies have had in AI. The United States has cited national security risks, though Beijing has accused it of trying to stunt its growth.
In a paper published last month, DeepSeek said it trained its AI model using about 2,000 of Nvidia’s H800 chips and $5.6 million. The chips are less powerful versions of Nvidia’s flagship H100 GPUs, and both have now been placed under US export restrictions. US AI companies have spent billions buying the latest Nvidia chips to build and run their own AI programs.
Silicon Valley investor Marc Andreessen said in a post on X last week that DeepSeek was “one of the most amazing and impressive breakthroughs” he had ever seen.
What makes DeepSeek different from ChatGPT?
DeepSeek has capabilities similar to that of ChatGPT and other AI models, such as Google’s Gemini, Meta’s Llama and Anthropic’s Claude. But DeepSeek researchers say they’ve developed techniques to make the original training and development of their model much more efficient.
Some of the ideas they detailed aren’t new to the AI world, but the company has apparently been able to apply them in a successful way.
DeepSeek has also made its AI models freely available for others to download and modify, a strategy also adopted by Meta for its Llama AI models. That means other companies can use DeepSeek’s technology to boost their own AI products.
OpenAI has instead chosen to keep ChatGPT’s technology to itself and sell access to its AI services to businesses.
How have markets and Silicon Valley reacted to DeepSeek?
The prices of stocks related to AI have risen to new heights over the past two years. DeepSeek’s revelations have some investors questioning whether chip companies such as Nvidia will be still be able to sell gargantuan numbers of chips if AI programs become more efficient.
The Nasdaq stock index, which is dominated by tech companies, fell 3% on Monday. Nvidia fell almost 17%, losing $589 billion in market capitalisation, though it is still one of the world’s most valuable companies, with a market cap of $2.9 trillion.
Chip manufacturer Taiwan Semiconductor Manufacturing Co, or TSMC, which fabricates chips for Nvidia and others, fell 13%. Other US chip companies, including ARM and Intel, also lost value.
Analysts said the market’s reaction underscored existing anxieties about whether the hype around AI will translate into real moneymaking products, and how soon that will happen. Leading tech companies have spent billions of dollars on new data centers in hopes they will power profitable AI services in the future.
Some AI leaders pushed back on the idea that more-efficient AI programs mean computer chips will be less important. Nvidia spokesperson John Rizzo in a statement on Monday called DeepSeek an “excellent AI advancement”, adding that deploying advanced AI models requires “significant numbers” of the company’s chips.
“As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can’t get enough of,” Microsoft CEO Satya Nadella said in a Sunday night post on X.
Some analysts suggested Monday’s sell-off may be a premature reflection of fear in the markets, noting that US companies have dominated artificial intelligence innovation so far.
What does DeepSeek show about China’s AI capabilities?
China’s government has - like its US counterpart - made AI a national priority and said it wants to be the world leader in AI technology by 2030. The country has also invested huge amounts of money into AI research and technology, in much the same way US companies have poured billions into AI data centres and development over the past two years.
Out of concern that China could use AI to catch up to US military and economic power, the Biden administration blocked US chip companies from exporting high-end AI hardware to China. But in some cases, Chinese companies were able to get around these controls by buying AI chips through other countries.
In his final weeks as president, Joe Biden imposed even stricter controls, limiting AI chip exports to most of the world to stop the smuggling of AI chips into China.
On Monday, the White House accused the Biden administration of allowing China to catch up to the United States in AI tech, though it is unclear whether Trump will move to impose even stricter controls on AI exports.
- Washington Post
