 model called ‘DeepSeek’ has shot to the top of Apple Store's downloads.){kind=link}
A Chinese-made artificial intelligence (AI) model called ‘DeepSeek’ has shot to the top of Apple Store’s downloads, stunning investors and sinking some tech stocks. Released recently on 20 January, it quickly impressed AI geeks before it got the attention of the entire tech industry – and the world. US President Donald Trump said it is a “wake-up call” for US companies that must focus on “competing to win”.
What makes DeepSeek so special?
It is the company’s claim that it was built at a fraction of the cost of industry-leading models like OpenAI – because it uses fewer advanced chips. That possibility caused chip-making giant Nvidia to shed almost $600bn (£482bn) of its market value on Monday – the biggest one-day loss in US history. ‘DeepSeek’ also raises questions about Washington’s efforts to contain Beijing’s push for tech supremacy – one of the key restrictions has been a ban on the export of advanced chips to China.
Beijing, however, has doubled down, with President Xi Jinping declaring AI a top priority. And start-ups like ‘DeepSeek’ are crucial as China pivots from traditional manufacturing – clothes and furniture to advanced tech – chips, electric vehicles and AI. What is DeepSeek: At its simplest, ‘DeepSeek’ is an AI-powered chatbot, like ChatGPT.
The Free App
This is the free app being downloaded on the Apple’s app store, where DeepSeek says it is designed “to answer your questions and enhance your life efficiently”.
But the AI model that powers it – called R1 – has some 670 billion parameters, making it the largest open-source large language model yet. It is according to the author of ‘Why Machines Learn: The Elegant Math Behind Modern AI’- Anil Ananthaswamy. Its reportedly as powerful as OpenAI’s O1 model – which powers ChatGPT – in mathematics, coding and reasoning.
Like many other Chinese AI models – Baidu’s Ernie or Doubao by ByteDance – DeepSeek is trained evades politically sensitive questions.
When the BBC asked the app what happened at ‘Tiananmen Square’ on 4 June 1989; DeepSeek did not give any details about the massacre, a taboo topic in China. It replied: “I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses.” Chinese government censorship was thought to be a huge challenge for developing AI. But ‘DeepSeek’ appears to have been trained on an open-source model, which enables it to perform complex tasks, while also withholding certain information.
And it says it has been able to do this cheaply – researchers behind it claim it cost $6 million (£4.8m) to build, a ‘shoestring budget’ compared to the billions spent by AI firms in the US. How exactly they did this is still unclear. DeepSeek’s founder reportedly built up a store of Nvidia A100 chips, which have been banned from export to China since September 2022.
Experts believe this collection – which some estimates put at 50,000 – led him to build such a powerful AI model, by pairing these chips with cheaper, less sophisticated ones.
US President Donald Trump has called the rise of Chinese company DeepSeek “a wake-up call” for the US tech industry, after the emergence of its artificial intelligence (AI) model triggered shockwaves on Wall Street.
Shares in major tech firms such as Nvidia fell sharply, with the chip giant losing almost $600bn (£482bn) in market value.
What has shaken the industry is DeepSeek’s claim that its R1 model was made at a fraction of the cost of its rivals – raising questions about the future of America’s AI dominance and the scale of investments US firms are planning.
DeepSeek has become the most downloaded free app in the US just a week after it was launched. Responding to the news, Trump said the latest developments in China’s AI industry may be “a positive” for the US.
“If you could do it cheaper, if you could do it [for] less [and] get to the same end result. I think that’s a good thing for us,” he told reporters.
He also said he was not concerned about the breakthrough, adding the US will remain a dominant player in the field.
DeepSeek is powered by the open source DeepSeek-V3 model, which its researchers claim was trained for around $6m (£4.2m) – significantly less than the billions spent by rivals. But this claim has been disputed by others in AI.
Its emergence comes as the US is restricting the sale of the advanced chip technology that powers AI to China.
To continue their work without steady supplies of imported advanced chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.
This has resulted in AI models that require far less computing power than before.
It also means that they cost a lot less than previously thought possible, which has the potential to upend the industry.
Following the shock to markets in the US on Monday, the FTSE 100 stock index of the UK’s biggest publicly-listed companies appeared resilient in early trading on Tuesday, rising by 0.46%.
Nvidia stock was up slightly in after-hours trading and futures on the tech-heavy Nasdaq index were also up by 0.1%.
Following the shock to markets in the US, shares in Japanese AI-related firms including Advantest, Softbank and Tokyo Electron fell sharply, helping to push the benchmark Nikkei 225 down by 1.4%.
Several other markets in Asia are closed for the Lunar New Year holiday. Mainland China’s financial markets will reopen on 5 February. Who founded DeepSeek: The company was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China. The 40-year-old, an information and electronic engineering graduate, also founded the hedge fund that backed DeepSeek. He was recently seen at a meeting between industry experts and the Chinese Premier Li Qiang. In a July 2024 interview, Liang said he was surprised by the reaction to the previous version of his AI model. “We didn’t expect pricing to be such a sensitive issue,” he said.
“We were simply following our own pace, calculating costs, and setting prices accordingly.”
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