Chinese startup DeepSeek’s launch of its latest AI models, which it says they have better versions than industry-leading models like Open AI in the United States at a fraction of the cost, is threatening to upset the technology world order.Moreover a Chinese-made artificial intelligence (AI) model called DeepSeek has given a shut up call to the top of Apple Store’s downloads, stunning investors and sinking some tech stocks.
Its latest version was released on 20 January, quickly impressing AI experts before it got the attention of the entire tech industry and the entire world.
The company has attracted attention in global AI circles after writing in a paper last month that the training of DeepSeek-V3 required less than $6 million worth of computing power from Nvidia H800 chips.
DeepSeek’s AI Assistant, powered by new version DeepSeek-V3, has leave behind rival ChatGPT to become the top-rated free application available on Apple’s App Store in the United States.
This has raised doubts about the reasoning behind some U.S. tech companies’ decision to pledge billions of dollars in AI investment and shares of several big tech players, including Nvidia, have been hit.
Who is Behind Deepseek :
DeepSeek was founded in December 2023 by Liang Wenfeng, the 39-year-old founder of Chinese AI startup and released its first AI large language model the following year. Liang, who graduated from Zhejiang University with degrees in electronic information engineering and computer science. But he now finds himself in the international spotlight. His company’s breakthrough AI model has not only challenged Western dominance in artificial intelligence but also sparked a global selloff in tech stocks following its launch last week.He was recently seen at a meeting hosted by China’s premier Li Qiang, reflecting DeepSeek’s growing prominence in the AI industry. He is the CEO of a hedge fund called High-Flyer, which uses AI to analyse financial data to make investment decisions – what is called quantitative trading. In 2019 High-Flyer became the first quant hedge fund in China to raise over 100 billion Yuan approximately($13m).
How are US companies like Nvidia hit?
DeepSeek’s undercut the wrong belief that bigger budgets and top-tier chips are the only ways of starting advancing AI, a prospect which has created uncertainty about the future of high-performance chips.The CH has proven that cutting-edge AI models can be developed with limited compute resources,” says Wei Sun, principal AI analyst at Counterpoint Research. In contrast, OpenAI, valued at $157 billion, faces scrutiny over its ability to maintain a dominant edge in innovation or justify its massive valuation and expenditures without delivering significant returns. The company’s possibly lower costs roiled financial markets on 27 January, leading the tech-heavy Nasdaq to fall more than 3% in a broad sell-off that included chip makers and data centers around the world. Nvidia appears to have been hit the worst as its stock price plunged 17% on Monday before slowly beginning to recover on Tuesday, roughly 4% by midday. Nvidia saw $600bn of its market value disappear, while its CEO, Jensen Huang, saw his net worth drop by nearly $21bn. The chip maker had been the most valuable company in the world, when measured by market capitalization, but fell to third place after Apple and Microsoft on Monday, when its market value shrank to $2.9tn from $3.5tn, Forbes. Moreover Tech billionaires lost almost $100bn in stock market selloff sparked by DeepSeek reported. DeepSeek is a privately owned company, which means investors cannot buy shares of stock on any of the major exchanges.
HOW BEIJING VIEW DEEPSEEK?
DeepSeek’s success has already been noticed in China’s top political circles. On January 20, the day DeepSeek-R1 was released to the public, founder Liang attended a closed-door symposium for businessman and experts hosted by Chinese premier Li Qiang, according to state news agency Xinhua.
Liang’s presence at the gathering is potentially a sign that DeepSeek’s success could be important to Beijing goal of overcoming Washington’s control and achieving self-sufficiency in strategic industries like AI.