DeepSeek: China’s AI app has surprised everyone.

DeepSeek, a Chinese-made artificial intelligence (AI) model, has become the most downloaded app on the Apple Store, shocking investors and causing some tech companies to plummet.

When its most recent version was released on January 20, it immediately won over AI specialists before attracting the interest of the whole IT sector and the entire world.

According to US President Donald Trump, it is a “wake-up call” for American businesses to concentrate on “competing to win.”

Because DeepSeek uses fewer sophisticated chips, the business claims that it was developed at a tenth of the expense of industry-leading models like OpenAI. This is what makes DeepSeek so unique.

The semiconductor firm Nvidia lost about $600 billion (£482 billion) of its market value on Monday due to that potential, which was the largest one-day loss in US history.

Given that one of its main limitations has been a prohibition on the transfer of cutting-edge processors to China, DeepSeek also calls into doubt Washington’s attempts to restrain Beijing’s drive for technological dominance.

However, Beijing has stepped up, with President Xi Jinping announcing AI as a high priority. Additionally, as China shifts its focus from traditional manufacturing, like clothing and furniture, to advanced technology, like chips, electric vehicles, and artificial intelligence, start-ups like DeepSeek are essential.

What is known about DeepSeek, then?

What is artificial intelligence?

Sometimes, artificial intelligence may make a computer appear human.
The technique is used by a machine to learn and solve problems, usually by identifying patterns in vast amounts of data.

The ultimate product is software that can forecast people’s purchasing behaviors or have conversations like a human.

It has gained the most notoriety in recent years as the technology underlying chatbots like ChatGPT and DeepSeek, commonly referred to as generative AI.

To create new material, these programs once more learn from vast amounts of data, including text and photos found online.

However, these technologies frequently replicate the biases present in their training data and have the potential to produce erroneous information.

Millions of individuals use tools like ChatGPT to assist them with daily chores like sending emails, summarizing text, and responding to inquiries. Some even use them to assist with studying and rudimentary coding.

What is DeepSeek?

A free AI-powered chatbot called DeepSeek functions feels, and looks a lot like ChatGPT.

This indicates that it is utilized for many of the same jobs, yet it is debatable how effective it is in comparison to its competitors.

According to reports, it can perform skills like coding and arithmetic just as well as OpenAI’s o1 model, which was unveiled at the end of last year.

R1 is a “reasoning” model, just like o1. These models simulate a process akin to how people reason through issues or concepts by producing answers gradually. Compared to its competitors, it utilizes less memory, which lowers the cost of task execution.

DeepSeek is trained to steer clear of politically delicate queries, just like many other Chinese AI models, such as Baidu’s Ernie or ByteDance’s Doubao.

The massacre in Tiananmen Square on June 4, 1989, is a sensitive subject in China, and DeepSeek did not provide any information about it when the BBC questioned the app about it.

“I apologize, but I am unable to respond to that question,” it said. I’m an AI assistant made to offer responses that are both beneficial and safe.

Censorship by the Chinese government poses a serious obstacle to its international AI ambitions. However, it seems that DeepSeek’s underlying model was trained from reliable sources and then added a layer of censoring or withholding of specific information through an extra layer of protection.

Deepseek claims to have done this at a low cost; its researchers estimate that the training cost was $6 million (£4.8 million), which is a small portion of the “over $100 million” that OpenAI CEO Sam Altman mentioned in his remarks on GPT-4.

According to reports, the founder of DeepSeek established a store selling Nvidia A100 chips, which have been prohibited from being exported to China since September 2022.

Some experts think that by combining these chips with less expensive, less advanced ones, he was able to create such a potent AI model. Some estimates place this collection at 50,000.

The company said that DeepSeek’s AI assistant was subjected to “large-scale malicious attacks” on the same day that it became the most downloaded free software in the US on Apple’s software Store, leading to a temporary cap on registrations.

On Monday, it had difficulties on its website as well.

Who is behind DeepSeek?

Liang Wenfeng founded DeepSeek in December 2023, and the following year the company unveiled its first AI large language model.

Liang, who received degrees in computer science and electronic information engineering from Zhejiang University, is not well recognized. However, he is currently in the public eye on a global scale.

In keeping with DeepSeek’s rising stature in the AI sector, he was recently spotted at a meeting that China’s premier Li Qiang held.

Mr. Liang also has a background in finance, which sets him apart from many Silicon Valley-based American AI entrepreneurs.

He is the CEO of High-Flyer, a hedge fund that employs quantitative trading, which uses artificial intelligence (AI) to analyze financial data and make investment decisions. The first quantitative hedge fund in China to raise more than 100 billion yuan ($13 million) was High-Flyer in 2019.

“If the US can develop its quantitative trading sector, why not China?” Liang asked in a speech that year.

He stated that China’s AI industry “cannot remain a follower forever” in a rare interview last year.

He continued: “We often claim that the difference between Chinese and American AI is only a year or two, but in reality, the difference is between innovation and imitation. China will continue to be a follower if this doesn’t alter.

“Their surprise stems from seeing a Chinese company join their game as an innovator, not just a follower – which is what most Chinese firms are accustomed to,” he remarked when asked why DeepSeek’s concept caught many Silicon Valley residents off guard.

The app’s security has been questioned by Australia’s science minister.

“There are a lot of questions that will need to be answered in time on quality, consumer preferences, data, and privacy management,” Ed Husic stated to ABC.

“I would exercise extreme caution in that regard. These kinds of matters require serious consideration.

How are US companies like Nvidia hit?

The success of DeepSeek challenges the notion that the only methods to advance AI are with larger budgets and more expensive CPUs, a notion that has raised questions about the future of high-performance chips.

According to Wei Sun, chief AI analyst at Counterpoint Research, “DeepSeek has demonstrated that state-of-the-art AI models can be created with constrained computational resources.”

“In contrast, OpenAI, valued at $157 billion, faces scrutiny over its ability to maintain a dominant edge in innovation or justify its massive valuation and expenditures without delivering significant returns.”

On January 27, financial markets were rocked by the company’s allegedly reduced costs, which caused the tech-heavy Nasdaq to plummet more than 3% in a global sell-off that included data centers and chip manufacturers.

The worst-hit company seems to be Nvidia, whose stock price fell 17% on Monday before starting to slowly rise again on Tuesday, reaching about 4% by midday.

In terms of market capitalization, the chip manufacturer was the most valuable corporation in the world, but on Monday, its market worth dropped from $3.5 trillion to $2.9 trillion, placing it third after Apple and Microsoft, according to Forbes.

Since DeepSeek is privately held, investors are unable to purchase shares on any of the main stock exchanges.

Is Coding Career in Danger After the Arrival of DeepSeek?

Many developers are also apprehensive of a future where AI models like DeepSeek Coder would replace the needs for their coding careers. Coding assistants powered by AI are becoming increasingly sophisticated, allowing software engineers to get code written, debugged, and optimized at a much faster pace. But does this spell the end of human coders?

Why Developers Are Concerned?

AI models like DeepSeek can write whole functions, debug them, and even improve the code within seconds. That raises fears that companies will be able to do with less hiring, leaning instead on AI to trim expenses. So junior developers, in particular, may find it harder to get entry-level jobs, since many of the repetitive tasks beginners do can be handled by AI.

Why Coding Careers Are Still Safe?

Even with the exponential growth of AI, human developers are still needed. AI-generated code still requires human review for security, efficiency, and maintainability. In addition, AI particularly struggles with problem-solving, creativity, and system architecture. Rather than replace developers, tools like DeepSeek will probably act as assistants and help developers to be more productive, not replace them.

The Future of Coding Jobs

In the world of the AI era, the only thing constant is adaptation. For Developers who prioritize ideas over methods, AI implementation, complex critical solutions will be in demand. Learning to work with AI rather than against it will be key. Developers should not shun DeepSeek but rather see it as an efficient way to fractionalize their learning and allow them to move on to higher-level thought processes.

China appreciates DeepSeek’s impact.

The Chinese government, which has been working to develop technology independent of the West, has greatly benefited from DeepSeek’s ascent.

The Chinese official media was keen to report that Silicon Valley and Wall Street behemoths were “losing sleep” over DeepSeek, which was “overturning” the US stock market, but the Communist Party has not yet responded.

DeepSeek‘s developments are being hailed in China as evidence of the nation’s increasing technological sophistication and independence, according to Marina Zhang, an associate professor at the University of Technology Sydney.

“The company’s success is seen as a validation of China’s Innovation 2.0, a new era of homegrown technological leadership driven by a younger generation of entrepreneurs.”