Here's all you may know about Deepseek, which is currently viral & being discussed right now!
A Chinese-developed artificial intelligence (AI) model named DeepSeek has taken the Apple Store by storm, quickly climbing to the top of the download charts and leaving investors stunned while causing some tech stocks to plummet. Released on January 20, its latest version has not only impressed AI experts but has also captured the broader attention of the tech industry and beyond.
Former U.S. President Donald Trump described DeepSeek's emergence as a "wake-up call" for American companies, emphasizing the need for a renewed focus on "competing to win." The uniqueness of DeepSeek lies in its creators' assertion that it was developed at a fraction of the cost of leading models like those from OpenAI, thanks to its reliance on fewer advanced chips. This revelation led to a staggering loss of nearly $600 billion in market value for chip-making giant Nvidia on a single day, marking the largest one-day decline in U.S. history.
DeepSeek also raises critical questions regarding Washington's strategy to curb Beijing's aspirations for technological dominance, particularly in light of existing restrictions on the export of advanced chips to China. Nevertheless, Beijing remains resolute, with President Xi Jinping prioritizing AI development. Start-ups like DeepSeek are pivotal as China shifts its focus from traditional manufacturing sectors, such as textiles and furniture, to advanced technology fields, including semiconductors, electric vehicles, and artificial intelligence.
So, what exactly do we know about DeepSeek?
What is DeepSeek?
DeepSeek is a free AI-powered chatbot that operates similarly to ChatGPT. It’s designed to handle a variety of tasks, though opinions differ on how it stacks up against competitors. Reports suggest it matches the capabilities of OpenAI’s o1 model, especially in areas like mathematics and coding.
Like o1, DeepSeek is classified as a "reasoning" model. This means it generates responses step-by-step, mimicking the way humans think through problems. One of its advantages is that it uses less memory than some of its rivals, which helps keep operational costs down.
However, DeepSeek, like several other Chinese AI models such as Baidu’s Ernie or ByteDance’s Doubao, is programmed to steer clear of politically sensitive topics. For instance, when the BBC inquired about the events at Tiananmen Square on June 4, 1989, DeepSeek refrained from discussing the massacre, stating: “I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses.” This reflects the significant challenge of Chinese government censorship in the realm of international AI development.
Despite these hurdles, DeepSeek’s foundational model seems to have been trained on reliable sources while implementing controls to withhold specific information. The team behind DeepSeek claims they achieved this training at a relatively low cost—around $6 million—compared to the "over $100 million" mentioned by OpenAI’s CEO Sam Altman regarding GPT-4.
The founder of DeepSeek reportedly amassed a collection of Nvidia A100 chips, which have been banned for export to China since September 2022. Some experts suggest that this stockpile, estimated at around 50,000 chips, enabled the development of such a robust AI model by combining these advanced chips with less expensive, simpler alternatives.
On the same day that DeepSeek's AI assistant became the most downloaded free app on Apple's App Store in the US, the company faced significant challenges, including "large-scale malicious attacks." As a result, they temporarily limited new registrations. Additionally, their website experienced outages on Monday.
DeepSeek was founded in December 2023 by Liang Wenfeng, who launched the company's first AI large language model the following year. While details about Liang are limited, he graduated from Zhejiang University with degrees in electronic information engineering and computer science. He is now gaining international attention.
Liang was recently seen at a meeting with China's Premier Li Qiang, highlighting DeepSeek's rising status in the AI sector. Unlike many American AI entrepreneurs who hail from Silicon Valley, Liang also has a financial background. He serves as the CEO of a hedge fund called High-Flyer, which leverages AI to analyze financial data for investment decisions, known as quantitative trading. In 2019, High-Flyer became the first quantitative hedge fund in China to raise over 100 billion yuan (approximately $13 million).
During a speech that year, Liang remarked, "If the US can develop its quantitative trading sector, why not China?" In a rare interview last year, he expressed that China's AI industry "cannot remain a follower forever." He noted that while there is often a perceived one or two-year gap between Chinese and American AI, the real issue lies in originality versus imitation. He emphasized that if this mindset doesn't shift, China will continue to lag behind.
When asked why DeepSeek's model surprised many in Silicon Valley, Liang replied that their astonishment comes from witnessing a Chinese company emerging as an innovator rather than merely a follower, which is the norm for many Chinese firms.
However, Australia's science minister has raised concerns about the app's security. Ed Husic stated, "There are many questions that will need to be answered regarding quality, consumer preferences, and data and privacy management."
"I would proceed with caution regarding that. Issues like these need careful consideration."
How are U.S. companies like Nvidia affected?
DeepSeek's success challenges the notion that only larger budgets and top-of-the-line chips can drive advancements in AI, creating uncertainty about the future of high-performance chips. Wei Sun, principal AI analyst at Counterpoint Research, notes, "DeepSeek has demonstrated that state-of-the-art AI models can be created using limited computing resources."
In contrast, OpenAI—valued at an impressive $157 billion—is under pressure to prove its ability to maintain a lead in innovation and justify its high valuation and spending, especially if it doesn't yield significant returns.
The potential for reduced costs at DeepSeek sent shockwaves through financial markets on January 27, causing the tech-heavy Nasdaq to drop over 3% in a widespread sell-off that impacted chip manufacturers and data centers globally. Nvidia seemed to bear the brunt of this decline, with its stock plummeting 17% on Monday before beginning a gradual recovery, up about 4% by midday on Tuesday.
Previously the most valuable company in the world by market capitalization, Nvidia fell to third place behind Apple and Microsoft on Monday, with its market value decreasing from $3.5 trillion to $2.9 trillion, according to Forbes.
DeepSeek remains a private entity, meaning investors cannot purchase shares on major exchanges.
China is celebrating the impact of DeepSeek.
DeepSeek's success represents a significant victory for the Chinese government, which aims to develop technology independent of Western influence. While the Communist Party has yet to issue an official statement, state media has highlighted how major players in Silicon Valley and Wall Street are feeling the pressure from DeepSeek, which is said to be "shaking up" the US stock market.
"In China, DeepSeek's achievements are viewed as proof of the country's advancing technological capabilities and growing self-sufficiency," explains Marina Zhang, an associate professor at the University of Technology Sydney. "The company's success is seen as a sign of China's Innovation 2.0, marking a new era of homegrown tech leadership led by a dynamic generation of entrepreneurs."
However, she cautions that this enthusiasm could also lead to a mindset of "tech isolationism."
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