After dominating app download rankings and driving down US tech stocks, DeepSeek, a Chinese artificial intelligence (AI) business has garnered international attention after unveiling its most recent model on January 20th, 2025. The model is called DeepSeek R1 which costs significantly less to produce and is on the same level of technology compared to the program ChatGPT created by OpenAI.
Investors throughout the world were alarmed by its popularity and potential, which caused the chip company Nvidia's market value to plummet by billions of dollars. It also raised doubts about whether American companies would dominate the rapidly expanding artificial intelligence (AI) market, as many had thought. The change shows that Chinese AI companies wanted to make their own programs.
“In the past thirty years, (China's tech industry) has only emphasized making money, and ignored innovation. Innovation is not solely driven by business, it also needs curiosity and a desire to create," DeepSeek AI founder Liang Wenfeng said.
A free AI-powered chatbot called DeepSeek functions feels, and looks a lot like ChatGPT. This indicates that it is utilized for many of the same jobs, yet it is debatable how effective it is in comparison to its competitors. According to reports, it can perform skills like coding and arithmetic just as well as OpenAI's o1 model, which was unveiled at the end of last year. R1 is a "reasoning" model, just like o1. These models mimic how people think through issues or concepts by generating answers gradually.
“It is just so crazy what these types of AI programs and models can do now with the vast amount of resources that are devoted towards it. AI is used for so many things now and it doesn't look like it is going to stop any time soon,” NHS senior Theo Anderson said.
On January 27, DeepSeek's ostensibly cheaper prices rocked financial markets. The tech-heavy Nasdaq plummeted more than 3% in a global sell-off that affected data centers and chip manufacturers worldwide. Nvidia's stock price fell 17%, but it started to rise again shortly after.
Based on market capitalization, the chip manufacturer was the most valuable firm in the world. On Monday, however, its market worth dropped from $3.5 trillion to $2.9 trillion, dropping it to third place behind Apple and Microsoft, according to Forbes.
The Chinese government, which has been working to develop technology independent of the West, has greatly benefited from DeepSeek's ascent. The Chinese official media was eager to report that Silicon Valley and Wall Street leaders were "losing sleep" over DeepSeek, which was "overturning" the US stock market, but the Communist Party has not yet responded.
Another risk has been added when U.S. regulators have threatened to delist Chinese stocks that don't adhere to stringent accounting standards. Some industry experts are concerned about DeepSeek's methods, and it's challenging for American investors to confirm any news or accounting that originates in China. Dario Amodei, the CEO, and cofounder of Anthropic, has raised the idea that DeepSeek has smuggled tens of thousands of sophisticated AI GPUs into China illegally and is just not disclosing them. DeepSeek, according to xAI founder Elon Musk, is "obviously" lying about its resources.
“I don’t know if China is smuggling in chips or not, but the U.S. is definitely on notice for some kind of response to the China surge in AI through DeepSeek. AI is going to be the reason the U.S. will be number one in tech or not,” NHS senior Evan Cowley said.
Comentários