The DeepSeek AI challenge has shaken the tech industry. It surpasses rivals like ChatGPT to become the top-rated free app on Apple’s App Store. This sudden rise has sparked a selloff in shares in major tech companies, including Nvidia, Microsoft, and Meta.
DeepSeek’s success is attributed to its open-source DeepSeek-V3 model. This model was developed for under $6 million, significantly less than the billions spent by its competitors. However, others in the AI space have disputed this claim.
Meanwhile, the US has restricted the sale of advanced chip technology to China. In response, Chinese Al developers have shared their work and experimented with new approaches. This has resulted in Al models that require less computing power and cost significantly less.
As a result, DeepSeek’s popularity has startled markets. ASML’s share price has tumbled over 10 and Siemens Energy’s shares have plunged 21 Experts warn that this could derail the investment case for the entire Al supply chain.
Furthermore, DeepSeek was founded in 2023 by Liang Wenfeng. He reportedly built up a store of Nvidia A100 chips, recently banned from exporting to China. This collection, estimated at 50,000, likely led to the launch of DeepSeek.
In addition, Liang Wenfeng’s strategy has raised concerns over rival companies’ profits, particularly given their significant investments in more expensive Al infrastructure.
The DeepSeek AI challenge has sparked a new wave of innovation in the tech industry. With its open-source model and low costs, DeepSeek is poised to disrupt the Al landscape.
