China’s DeepSeek – an AI chatbot intended to rival ChatGPT – is currently the number one download in the App Store, after its performance took US companies by surprise.
The Chinese startup appears to be rivalling the performance of OpenAI’s ChatGPT despite having cost far less to develop, and that’s hitting the market valuations of major US AI players …
Bloomberg reports.
Chinese startup DeepSeek’s eponymous AI assistant rocketed to the top of Apple Inc.’s iPhone download charts, stirring doubts in Silicon Valley about the strength of America’s lead in AI.
The app’s underlying artificial intelligence model is widely seen as competitive with OpenAI and Meta Platforms Inc.’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain.
Reviews praise the app as being as good as the pro version of ChatGPT, with DeepSeek also liked for showing its work, lending greater confidence in its results. We recently flagged it as something to watch.
‘Sending shockwaves through Silicon Valley’
VentureBeat says AI experts are echoing the view that DeepSeek truly is competitive with the top US models.
The open-source availability of DeepSeek-R1, its high performance, and the fact that it seemingly “came out of nowhere” to challenge the former leader of generative AI, has sent shockwaves throughout Silicon Valley and far beyond, based on my conversations with and readings of various engineers, thinkers and leaders […]
Web entrepreneur Arnaud Bertrand didn’t mince words about the startling implications of DeepSeek’s success either, writing on X: “There’s no overstating how profoundly this changes the whole game. And not only with regards to AI, it’s also a massive indictment of the US’s misguided attempt to stop China’s technological development, without which Deepseek may not have been possible (as the saying goes, necessity is the mother of inventions).”
DeepSeek uses advanced software, not hardware
Generative AI models are powered by Nvidia GPUs. Mainstream chatbots from OpenAI, Google, and Anthropic use more than half a million of these. US export restrictions on the advanced tech means that DeepSeek was only able to obtain around 50,000 GPUs, meaning it’s delivering comparable results with only 10% of the processing power.
Wired reports that this forced the Chinese company to focus on software.
“Unlike many Chinese AI firms that rely heavily on access to advanced hardware, DeepSeek has focused on maximizing software-driven resource optimization,” explains Marina Zhang, an associate professor at the University of Technology Sydney, who studies Chinese innovations. “DeepSeek has embraced open source methods, pooling collective expertise and fostering collaborative innovation. This approach not only mitigates resource constraints but also accelerates the development of cutting-edge technologies, setting DeepSeek apart from more insular competitors.”
Sent US tech shares tumbling
The Financial Times reports that US tech shares have been hit hard.
The results sent a shockwave through markets on Monday, with Nvidia on course to lose more than $300bn of market value, the biggest recorded drop for any company, as investors reassessed the likely future investment in AI hardware […]
European chip equipment maker ASML was down 10 per cent. Microsoft fell 6 per cent and Meta slid 5 per cent. Stock futures pointed to a 4.2 per cent drop in the tech-heavy Nasdaq, while the S&P 500 index was set to decline 2.4 per cent.
Image: 9to5Mac collage of images from the App Store and Scott Webb on Unsplash
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