DeepSeek: the Chinese AI app that has the world talking
The emergence of DeepSeek, a Chinese artificial intelligence application, has sent shockwaves through the technology sector and financial markets. Launched in January 2025, DeepSeek quickly became the most downloaded free app on Apple’s App Store in the United States, the United Kingdom, and China, surpassing established competitors like ChatGPT. This rapid ascent has prompted discussions about the shifting dynamics of global AI leadership and raised questions about the sustainability of American dominance in this field.
Background and Development
DeepSeek was founded by Li Wenf in Hangzhou, China. With a background in information and electronic engineering, Li has managed to create a low-cost AI model that reportedly cost less than $6 million to develop—an astonishing figure compared to the billions invested by competitors such as OpenAI and Google. The app operates on an open-source model known as Seek-V, which its developers claim can perform tasks comparable to those of OpenAI’s latest models, particularly in mathematics, programming, and natural language processing.
The development of DeepSeek is notable not only for its cost-effectiveness but also for its innovative approach to overcoming technological restrictions. Since 2021, U.S. export controls on advanced chips have limited Chinese access to high-performance computing hardware. In response, Chinese developers have turned to alternative methods and less advanced chips to train their models, leading to significant reductions in operational costs.
Impact on Financial Markets
The launch of DeepSeek has had immediate repercussions on American tech stocks. Following its debut, shares of Nvidia—a key player in AI chip manufacturing—plummeted by 17%, resulting in a staggering loss of nearly $600 billion in market capitalization. This decline marks one of the most significant downturns in U.S. stock market history. Venture capitalist Marc Andreessen described this moment as a “Snik moment,” referencing the Soviet Union’s launch of Sputnik that triggered the space race, indicating that DeepSeek’s emergence could similarly catalyze a new competitive landscape in AI.
Features and Performance
DeepSeek distinguishes itself from competitors through unique features such as its integrated deep think capability, which provides insights into its reasoning processes. Users can interact with DeepSeek similarly to ChatGPT but will find that it refrains from discussing sensitive topics, reflecting China’s stringent content regulations. The app’s ability to perform complex tasks with significantly lower costs has raised eyebrows across Silicon Valley, where many view it as a potential threat to established players like OpenAI and Microsoft.
Challenges Ahead
Despite its initial success, DeepSeek faces challenges typical of emerging technologies. The app’s rapid rise has led to scrutiny regarding its claims and methodologies. Industry experts have expressed skepticism about whether DeepSeek can sustain its performance against ongoing advancements from American counterparts who continue to innovate at a rapid pace. Additionally, the app recently experienced a cyberattack that forced it to limit new user registrations temporarily, highlighting vulnerabilities that could impact user trust and growth.
Conclusion
DeepSeek’s emergence represents a significant shift in the global AI landscape, challenging long-held assumptions about American superiority in technology development. As it continues to gain traction, both users and investors will be watching closely to see how this new player navigates the complexities of competition, regulation, and technological advancement in an increasingly interconnected world.
