DeepSeek rattles and shocks US tech sector with new AI model

Chinese firm DeepSeek has stunned industry insiders and sent shockwaves through the global tech sector by releasing an artificial intelligence (AI) model with capabilities that rival the creations of its US counterparts, Google and OpenAI.

DeepSeek-R1’s creator said its model was developed using less advanced and fewer computer chips than those employed by US tech giants.

What can it do?

Available as an app or on desktop, DeepSeek can do many of the things that its Western competitors can—write song lyrics, help create a personal development plan, or even create a recipe for dinner based on what’s in the fridge.

The AI chatbot can also communicate in multiple languages, though it was strongest in English and Chinese.

Over the weekend, DeepSeek’s chatbot surged to become the most downloaded free app on Apple’s US App Store, displacing OpenAI’s ChatGPT.

In a research paper released last week, the model’s development team said they had spent less than $6 million on computing power to train the model — a fraction of the multimillion-dollar AI budgets enjoyed by US tech giants such as OpenAI and Google, the creators of ChatGPT and Gemini, respectively, Al Jazeera reported.

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‘Wake-up call’

US President Donald Trump said Monday that the low-cost Chinese AI model DeepSeek was a “wake-up call” for US firms after its emergence caused a rout in tech shares.

“Hopefully, 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.”

However, Trump said the shock could also be “positive” for Silicon Valley by forcing it to innovate more cheaply.

“I would say that could be a positive,” Trump said. “So instead of spending billions and billions, you’ll spend less, and you’ll come up with hopefully the same solution.”

What is Deep Seek?

DeepSeek, which is based in Hangzhou, was founded in late 2023 by Liang Wenfeng, a serial entrepreneur who also runs the hedge fund High-Flyer.

Though less known outside China, Liang has an extensive history of combining burgeoning technologies and investing.

In 2013, he co-founded Hangzhou Jacobi Investment Management, an investment firm that employed AI to implement trading strategies, along with a co-alumnus of Zhejiang University, according to Chinese media outlet Sina Finance.

Liang went on to establish two more firms focused on computer-directed investment — Hangzhou Huanfang Technology Co and Ningbo Huanfang Quantitative Investment Management Partnership – in 2015 and 2016, respectively.

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