A Chinese company called DeepSeek has taken the tech world by storm with its AI-powered chatbot, which became the most downloaded free app on Apple's App Store shortly after launching in the U.S. on January 10.
What's So Special About DeepSeek?
DeepSeek claims its AI models rival industry giants like ChatGPT but at a fraction of the cost. According to the company, they only spent $6 million to develop their technology, a shockingly low figure compared to the billions spent by U.S.-based AI companies.
Who's Behind DeepSeek?
DeepSeek was founded by Liang Wenfeng, a Chinese entrepreneur and engineer. He funded the company partly with money from his own hedge fund and took a creative approach to hardware. Liang stockpiled around 50,000 Nvidia A100 chips before they were banned from export to China. By combining these with cheaper chips, he managed to build powerful AI systems on a budget.
Liang's success has even caught the attention of Chinese Premier Li Qiang, and he's quickly become a rising star in the tech industry.
Why Is It So Popular?
The app is free to use and has gained praise for its ability to generate conversational, personality-rich responses. Many users have called it a great alternative to ChatGPT. However, it avoids politically sensitive topics. When asked about the 1989 Tiananmen Square protests, it replied, "I cannot answer that question. I am designed to provide helpful and harmless responses."
DeepSeek's low-cost success is raising eyebrows in Silicon Valley. On January 27, news of the app sent financial markets into a frenzy. The tech-heavy Nasdaq index dropped by more than 3%, and Nvidia, a major U.S. chipmaker- took a massive hit.
Nvidia's stock price plummeted by 17% in a single day, wiping out $600 billion in market value, the largest one-day loss for any U.S. company in history.
This shockwave challenges the idea that cutting-edge AI requires massive budgets and the world’s most advanced chips. If DeepSeek can compete using less expensive hardware, it could reshape the future of AI, and the tech industry as a whole.
Why It Matters
DeepSeek's rise shows how innovation can thrive even with limited resources. With its disruptive approach, it's not just a new app, it's a wake-up call to the entire AI industry.
