A Chinese AI model named DeepSeek has rapidly risen to the top of Apple Store downloads, surprising investors and triggering a drop in some tech stock values. The AI model that shook up Silicon Valley also prompted US President Donald Trump to issue a ‘wake-up call’ for American companies, urging them to focus on ‘competing to win’. It was released on 20 January, quickly impressing AI. Here are some facts that you need to know about the potential AI giant.
What Exactly Is The DeepSeek?
Just to put it simpls, DeepSeek is an AI-powered chatbot, like ChatGPT. It can be downloaded on the Apple’s app store for free. According to Deepseek, it is designed “to answer your questions and enhance your life efficiently”. According to a BBC report, The AI model behind it, known as R1, boasts approximately 670 billion parameters, making it the largest open-source large language model to date. It is reportedly as powerful as OpenAI’s O1 model – which powers ChatGPT – in mathematics, coding and reasoning.
As usual, like many other Chinese AI models- Baidu’s Ernie or Doubao by ByteDance- DeepSeek is strained evades politicalley sensitive questions. If such questions are posed to the AI model, it would respond by stating that it cannot answer and that it is an AI assistant designed to provide helpful and harmless responses.
Chinese government censorship was initially seen as a significant challenge for AI development. However, DeepSeek appears to have been built on an open-source model, enabling it to handle complex tasks effectively while still restricting access to specific types of information.
How Did It Shake Silicon Valley?
DeepSeek’s app quickly topped Apple’s App Store charts, a notable achievement given U.S. restrictions on Chinese access to advanced AI chips. Shares in major tech firms such as Nvidia fell sharply, with the chip giant losing almost $600bn (£482bn) in market value. Nvidia’s stock experienced its largest single-day drop, sparked by concerns over a new AI model from the Chinese startup DeepSeek. This development triggered a wider sell-off in tech stocks, affecting markets globally from New York to Tokyo. The shockwave from DeepSeek’s competitive AI innovation led to broader instability across tech sectors.
Nvidia – The Chip Giant!
After Nvidia’s stock soared with the release of OpenAI’s ChatGPT, it recently faced a sharp decline, losing nearly $600 billion in value. This was mainly due to competition from DeepSeek, which caused Nvidia’s shares to fall to a four-month low. The drop also impacted the Nasdaq index, while tech stocks in Tokyo followed the trend.
The major realization is that DeepSeek has developed a foundational AI model that achieves similar results to American competitors like ChatGPT and Meta’s Llama, but at a fraction of the cost. This was made possible by using far fewer chips, making the model both more efficient and cost-effective. This breakthrough has raised concerns within the industry, particularly regarding the future demand for specialized hardware used in AI development.
How US President Donald Trump Reacted
Reacting to the advances by DeepSeek, Donald Trump has said that the launch of the chatbot by China is a “wake-up call” for US tech firms in the global race to dominate artificial intelligence. “The release of DeepSeek, AI from a Chinese company, should be a wake-up call for our industries that we need to be laser-focused on competing to win,” Trump said. He highlighted that DeepSeek’s ability to match the performance of established AI models while using far fewer resources poses a direct challenge to the dominance of the US-driven AI boom. This efficiency threatens to shift the competitive landscape in AI development, making it harder for US-based companies to maintain their edge. “That’s good because you don’t have to spend as much money,” Trump said. “I view that as a positive, as an asset.”
