Do you know? A Chinese-made artificial intelligence model called DeepSeek has significantly taken the attention of AI geeks all around the world.
Since its launch on 20th January, it has impacted the US stock market. Moreover, it has overtaken ChatGPT by becoming the most downloaded one of the best free artificial intelligence apps on Apple’s app store.
Too many registrations led to various outages on DeepSeek Monday morning, which is said to be due to the limitations enforced due to a cyber attack.
One might ask what’s so special about DeepSeek that it created chaos in the AI industry.
According to the company’s claim, it is developed at a fraction of the cost of prominent artificial intelligence models like OpenAI; however, it integrates fewer advanced chips.
Let’s first explore what DeepSeek is, how it is better than other AI models, and how it has caused a frenzy in Silicon Valley and Wall Street.
What is DeepSeek?
DeepSeek is an advanced AI-powered chatbot, operated on the AI model R1, which works and looks similar when compared to the likes of ChatGPT.
According to some reports, it is as powerful as the OpenAI o1 model when undertaking tasks like using AI for assignments, mathematics, physics, coding, and logical reasoning.
However, the best part is that the cost of DeepSeek is 90-95% less as compared to other AI platforms.
When asked complex questions and problems from DeepSeek, its responses were twice as quick and efficient as those of ChatGPT.
DeepSeek’s technology has been critically acclaimed all around the world, including by the chief of OpenAI, Sam Altman.
According to him, “It is an impressive model that is around for what they are able to deliver for the price”, however, by mentioning OpenAI, he added, “We’ll move towards much better models in the future”.
However, DeepSeek also has many weaknesses. One, it is heavily censored for American Users.
Two, like other Chinese AI models like Baidu’s Ernie or ByteDance’s Doubao, it restrains from answering politically sensitive questions.
When asked DeepSeek to elaborate on the 1989 Tiananmen Square massacre, a topic removed by Chinese officials from the internet, it responded:
“I am sorry, I cannot answer this question, this is beyond my current scope, I am an AI assistant trained to generate harmless and helpful responses”.
Who is the Founder of DeepSeek?
DeeSeek was founded by 40-year-old Liang Wenfeng in December 2023 in Hangzhou. No one knew about Liang since 20th January.
He is a graduate of Zheijiang University with degrees in computer science and electronic information engineering. His hedge fund company, High-Flyer, backed DeepSeek.
Do you know? In 2019, High-Flyer became the first hedge fund company to generate over 100 billion yuan – equivalent to 23 million dollars.
“If the US can develop its quantitative trading sector, then why not China?” he said in a speech, “Our AI sector cannot always be a follower”.
He further added, “There might be a one or two years of gap between Chinese and American AI”, he said, “But the real gap is between originality and imitation. If we don’t change this, China will more likely always be a follower”.
How DeepSeek Impacted US Companies?
Since the DeepSeek AI model R1 has emerged, it has impacted Wall Street to a greater extent.
As the users increasingly started to download DeepSeek for assignment writing and other important tasks, the shares of tech firms like Nvidia immensely dropped, which caused them a loss of almost $600bn in market value.
Nvidia is the same company that chose chips used in the AI models of leading artificial intelligence companies like OpenAI.
According to Forbes, Nvidia has fallen to third place after Apple and Microsoft on this Monday, which was previously on the first. It’s market value reduced from $3.5tn to $2.9tn.
On January 27th, Nvidia fell more than 3% on NASDAQ in broach that included data centres and chip makers worldwide.
Due to this major impact on Nvidia, DeepSeek has created uncertainty and concerns about the performance of high-technology chips.
Donald Trump: It’s a “wake-up call” for USA Tech Firms
After DeepSeek caused shockwaves on Wall Street, US President Donald Trump has raised concerns by saying, “It is a wake-up call for the US tech industry”.
Trump further said: “China’s AI industry might have a positive impact on the US”.
“If you can use it for less money and get similar results, then I think that’s good for us”, He said, ”We are not afraid of this, as the US will always be a dominant player in the field”.
What Experts Say About DeepSeek?
According to the co-founder and executive of an AI software company, Databricks, Ion Stoica, “The lower cost of DeepSeek than other artificial intelligence models can significantly compel more companies to leverage AI in their business”.
He further said, ”If it continues to work smoothly, this affordable price can significantly increase the progress of AI”. “Moreover, it can also boost overall market expansion, and this will catapult the overall market value”.
As we have discussed before, DeepSeek claims to use fewer chips than leading AI models. According to them, they can train their model using merely 2000 specialized chips, which in contrast is much less than other AI models that use 16000 chips.
However, not everyone believes DeepSeek’s claim. Most prominent among them all is the tech mogul Elon Musk.
He responded to a post by saying “Absolutely”, that claimed that DeepSeek used around 5000 Nvidia chips, whose export has now been banned in China.
According to the AI analyst at Counterpoint Research, Wei Sun, “DeepSeek has successfully provided that you don’t require high budgets to develop cutting-edge AI models. You can also develop them with limited computer resources.”
