China’s DeepSeek AI has surpassed ChatGPT and other rivals to become the top-rated free app on Apple’s App Store in the US and other countries. It is powered by the open-source DeepSeek V3 model, developed at a cost of under $6 million, reportedly requiring less computing power than competitors and offering performance comparable to Claude-3.5, GPT-4o, and other rivals.
This news has caused a sharp drop in tech stocks, including NVIDIA, ASML, Google parent company Alphabet, and Microsoft. The overall Nasdaq and S&P 500 have also taken a hit, and markets in Europe and Japan are affected. DeepSeek provides coding content creation and research features similar to ChatGPT, with its first release available under an MIT license for commercial use without restrictions.
DeepSeek was founded in 2023 by Liang Wenfeng and is headquartered in Hangzhou, China. Wenfeng stockpiled NVIDIA A100 chips before the US export ban and paired those with less powerful chips that can still be imported, enabling the company to build and train AI models at a far lower cost than previously thought possible. However, claims about the technology’s efficiency have been questioned by analysts from Citi and others, who have pointed out the more restrictive environment for AI development in China compared to the US.
The rise of DeepSeek has raised concerns about potential profits for rivals like OpenAI, which have already invested billions in AI infrastructure. Despite the attention, DeepSeek has been a target for large-scale malicious attacks, causing the company to temporarily limit new registrations for the service.
Summary:
China’s DeepSeek AI has become the top-rated free app on Apple’s App Store in the US. This news caused a sharp drop in tech stocks, impacting the overall Nasdaq and S&P 500, as well as markets in Europe and Japan. DeepSeek’s efficient AI models raised concerns among rivals, while a large-scale malicious attack prompted the company to limit new registrations.