This post is also available in:
עברית (Hebrew)
China’s DeepSeek AI model is making waves across the tech world, with its AI Assistant recently surpassing ChatGPT to become the top-rated free app on the U.S. App Store. This surge in popularity, which follows the release of DeepSeek on January 10th, has quickly captured the attention of Silicon Valley, challenging the prevailing belief that the U.S. holds a monopoly on AI development.
The DeepSeek AI Assistant is powered by the DeepSeek-V3 model, and its creators claim rivals the most advanced models globally. This claim has stirred concern among U.S. tech giants, especially with its growing recognition as a serious contender in the competitive AI market.
What has particularly struck industry experts is the model’s ability to outperform expectations despite utilizing lower-cost components. According to Reuters, DeepSeek researchers have revealed that they trained the model with Nvidia’s H800 chips, costing them less than $6 million. While this claim has been disputed, it has raised eyebrows, especially considering the Biden administration’s export controls on advanced chips to China, designed to curb China’s AI and semiconductor capabilities. If true, the cost-efficiency and lower-power chips used by DeepSeek challenge the effectiveness of these restrictions and may have wider implications for the global AI industry.
The success of DeepSeek has had significant ripple effects in financial markets. Technology stocks took a hit on Monday, January 27th, with shares of AI chipmaker Nvidia plummeted by 8.4%. The news of DeepSeek’s success has sparked doubts about the future demand for high-tech chips and data centers, sectors that were previously expected to see enormous growth driven by AI advancements.
Despite its rapid rise, much remains unknown about DeepSeek. While several Chinese companies have launched AI models in recent years, DeepSeek stands out as the first to be widely recognized by the U.S. tech community as potentially surpassing the capabilities of cutting-edge American models.
As the global AI landscape shifts, DeepSeek’s success could signal to the U.S. that the race for AI dominance is more competitive than ever.
