DeepSeek: Chaos Hits Western Tech as ‘$6M’ Chinese AI Emerges : Tom M
by: Tom M
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### Summary The Western tech industry is facing turmoil due to the unexpected rise of a Chinese AI app called DeepSeek. This chatbot has surpassed ChatGPT to become the most popular free app on the Apple App Store in the US, UK, and China. DeepSeek is based on the DeepSeek-V3 model, which reportedly cost only $6 million to develop, significantly less than its Western counterparts. As a result of DeepSeek's emergence, tech stocks in companies like Nvidia, Microsoft, Oracle, and Meta have seen declines. The US government had previously imposed restrictions on advanced chip sales to China, but this may have inadvertently encouraged Chinese firms to innovate more efficiently, leading to AI models that require less computing power. DeepSeek's launch coincides with upcoming financial reports from major companies, raising concerns about the competitive landscape in AI. Experts suggest that if the claims about DeepSeek's cost-effectiveness are true, it could significantly lower the barriers to accessing advanced AI technology. Marc Andreessen, a prominent venture capitalist, referred to DeepSeek's launch as "AI’s Sputnik moment," highlighting its potential impact on the industry. ### Key Details - **App Name:** DeepSeek - **Model:** DeepSeek-V3 - **Development Cost:** $6 million - **Market Impact:** Overtook ChatGPT in app rankings; caused stock declines in major tech companies. - **Government Policy:** US restrictions on chip sales to China may have backfired, encouraging innovation in Chinese AI firms. - **Expert Opinions:** Potential breakthrough in AI training costs could enhance productivity and accessibility. ### Additional Context DeepSeek's rapid rise underscores the growing competition in the AI sector, particularly between the US and China. The effectiveness and affordability of AI technologies are critical as companies strive to leverage AI for various applications. The situation also reflects broader geopolitical tensions and the implications of technological advancements on global markets. ### Hashtags for SEO #AI #DeepSeek #ChatGPT #TechStocks #ArtificialIntelligence #ChineseTech #Innovation #USChinaRelations #DeepLearning #AppStore #MarketTrends
Chaos has hit the Western tech sector amid the surprise emergence of the Chinese artificial intelligence app, DeepSeek.
The chatbot – which has overtaken ChatGPT as the top-rated free product on the Apple App Store in the US, UK, and China – is powered by the open-source DeepSeek-V3 model, which was supposedly developed for just $6M.
A New Giant in the Field?
Tech and AI stocks are now expected to be hit with futures trading pointing towards heavy falls in the United States when Wall Street today.
Nvidia, Microsoft, Oracle, and Meta shares were all down on Monday morning ahead of the opening of the US markets, reports say.
The sudden appearance of DeepSeek appears to threaten US dominance in the AI industry, especially if claims that it was developed for a fraction of the cost of rivals like ChatGPT are true.
The US government had strengthened restrictions on the sale of American-made advanced chips to China in 2021.
But this may have been a miscalculation, as it means that Chinese AI firms are now sharing their work more readily, resulting in artificial intelligence models that run on much less computing power.
The timing of DeepSeek’s launch last week is somewhat auspicious, with the financial results of Microsoft and Meta expected on Wednesday, and Apple’s expected on Thursday.
The Chinese startup says its product uses less data at a fraction of the cost of currently well-known models.
Reuters reported that shares in AI players tumbled across the world – from Tokyo to Amsterdam.
Senior portfolio manager at Pictet Asset Management, Jon Withaar, said: “We still don’t know the details and nothing has been 100% confirmed in regards to the claims. But if there truly has been a breakthrough in the cost to train models from $100M+ to this alleged $6M number, this is actually very positive for productivity and AI end users, as cost is obviously much lower meaning lower cost of access.”
Marc Andreessen, the Silicon Valley venture capitalist, described DeepSeek-R1 as “AI’s Sputnik moment“.
Summary
Chinese AI app DeepSeek was launched earlier this year amid claims that its DeepSeek-V3 model was developed for just $6M – a fraction of the cost of Western rival products.
It has now overtaken ChatGPT to become the top app on the Apple App Store in China, the US, and the UK, and shares in AI players across the world have tumbled amid the launch.
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January 27, 2025 at 09:30PM
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