In a significant development in the artificial intelligence (AI) sector, Chinese startup DeepSeek has introduced its AI model, DeepSeek-R1, which rivals established platforms like OpenAI’s ChatGPT. Interestingly, DeepSeek achieved this with a development cost of just $6 million, a fraction of the investment used for its Western counterparts, such as ChatGPT, Bard, and Claude.
Founded in 2023 in Hangzhou, China, DeepSeek has rapidly ascended in the AI landscape. Its DeepSeek-R1 model has quickly become the most downloaded free app on the iOS App Store in the United States, beating ChatGPT in no time.
As expected, DeepSeek’s arrival has had immediate financial repercussions. Nvidia, a leading supplier of AI hardware, experienced a 17% drop in its stock value, erasing over $600 billion in market capitalization. Additionally, just one day after DeepSeek’s launch, the US stock market lost about $1 trillion. This decline reflects investor concerns about the potential shift in AI development dynamics.
President Donald Trump has spoken on the launch of this new AI platform, saying it should be a “wake-up call” for the United States. Some of the interesting features of DeepSeek include the ability to respond in real time and create browser agents without using code.
However, DeepSeek may not be all glitters, as critics on X have pointed out from its privacy policy. According to the policy, DeepSeek may collect device and network information and send it to China, making users’ info vulnerable.
Still, as DeepSeek continues to unfold, it poses a formidable challenge to existing AI platforms, potentially reshaping the competitive landscape and prompting established players to reassess their approaches.
