| DeepSeek has turned the tech world upside down. The low-cost, tiny Chinese company has developed AI chatbots at just a fraction of the cost of the major players in the industry. |
Jan.28 (DPnet).– A surprisingly powerful and efficient Chinese AI model created a year ago has overtaken the tech sector by storm. It is known as DeepSeek R1. This is a breakthrough AI product of a startup business that has somehow managed a market commotion that famed tech investor Marc Andreessen has called “AI’s Sputnik moment”: R1 can nearly match the capabilities of its far more famous rivals, including OpenAI’s GPT-4, Meta’s Llama and Google’s Gemini — but at a fraction of the cost.
On Monday, DeepSeek, a tiny company that reportedly employs no more than 200 people, caused American chipmaker Nvidia to have almost $600bn wiped off its market value – the biggest drop in US stock market history. The startup was founded in 2023 in Hangzhou, China, by Liang Wenfeng, who previously co-founded one of China's top hedge funds, High-Flyer.
DeepSeek, which has developed two models, V3 and R1, is now the most popular free application on Apple's App Store across the US and UK. It includes the ability to rethink its approach to a math problem while, depending on the task, being 20 to 50 times cheaper to use than OpenAI's o1 model, according to a post on DeepSeek's official WeChat account. R1 gained significant attention this week when the company revealed its shockingly low cost of operation. And it is open-source, which means other companies can test and build upon the model to improve it.
Some people expressed their reservations about the Chinese company and its handling of users' data. "DeepSeek is a Trojan Horse," according to billionaire investor and hedge fund manager Bill Ackman. In contrast, TikTok, which was temporarily blocked in the US earlier this month due to national security concerns, "is just a toy by comparison," he added.
Speaking to House Republicans on Monday, President Donald Trump called the development a "wakeup call for our industries that we need to be laser-focused on competing to win".