What Is DeepSeek? The Chinese AI Company Shaking Up the Stock Market

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The Chinese AI app DeepSeek has shaken up U.S. stock markets, causing a sell-off in major tech stocks and sparking concerns about the future of America’s dominance in AI.

The app’s developers claim to have built the model for a fraction of the cost of other AI giants, prompting skepticism in Silicon Valley.

OpenAI, the creator of ChatGPT, reportedly spent $5 billion last year, DeepSeek’s developers claim they created their latest model for just $5.6 million.

This represents a fraction of the budget AI giants like OpenAI, Google, and Anthropic typically use to develop their advanced models.

DeepSeek’s emergence has challenged long-held assumptions about the cost and development of AI, causing uncertainty in the sector.

The app’s sudden arrival has been seen as a “flex” by China and a “black eye for US tech,” prompting a reevaluation of America’s position in the AI race.

What is DeepSeek?

DeepSeek is a free AI chatbot that works much like ChatGPT in functionality and design.

Like its competitors, it handles a wide range of tasks, though its effectiveness compared to other models remains a topic of debate.

It runs on the R1 model, which thinks step by step, similar to how people solve problems. This method uses less memory, making it cheaper to operate.

DeepSeek was founded in December 2023 by Liang Wenfeng, and released its first AI large language model on January 20.

Source: BBC