After its release in the U.S. market, a Chinese company’s AI-driven chatbot app, developed by DeepSeek, gained immense popularity within a short time. The app, which has secured the top spot on the list of the most downloaded free apps on the Apple Store, has become a major challenge for American AI companies. The cost DeepSeek incurred in developing its AI model is significantly lower than what American companies spend. As a result, a major shift has occurred in the tech market, and Silicon Valley entrepreneur Marc Andreessen has called it a groundbreaking discovery in the AI world.
The Key to DeepSeek’s Success
DeepSeek’s app is being touted as a competitor to ChatGPT. However, its standout feature is its development cost, which was just $6 million — a fraction of what U.S.-based AI companies have spent. While American companies have spent hundreds of millions of dollars, DeepSeek’s cost-effective app has opened up new possibilities in the tech market.
DeepSeek: A New Technology Competitor from China
DeepSeek, a Chinese AI company, was founded in July 2023 in Hangzhou, southeastern China. On January 10, their AI assistant app was released in the U.S. market. Liang Wenfeng, DeepSeek’s co-founder and an IT expert, started the company using funds from a headset he had created. He had previously acquired a large number of A100 chips from the U.S. company NVIDIA, and despite the ban on chip exports to China, he used those chips, along with relatively cheaper alternatives, to develop DeepSeek’s app.
App Popularity: The Secret to Success
DeepSeek’s AI app quickly became the most downloaded app on the Apple Store. The app’s primary goal is to increase users’ work efficiency and provide accurate answers to their queries. Experts say that DeepSeek’s success is due to their powerful and user-friendly AI assistant tool. The app has also been registered as the highest-rated free app in the U.S.
Cost Difference: A Challenge to the U.S. AI Market
The cost of developing DeepSeek’s AI model is several hundred million dollars less than U.S. apps, which has led to a major shift in the U.S. AI market. As a result, on January 27, stock markets saw changes, particularly with chip manufacturers and data center shares experiencing significant fluctuations. The biggest loss was for U.S.-based NVIDIA, which produces powerful chips for AI operations. On Monday, NVIDIA’s market value dropped by $60 billion, marking the largest single-day market loss in U.S. history.
DeepSeek’s Technology: A New Reality
DeepSeek used cheaper and less complex technology compared to NVIDIA’s chips in its AI development. As a result, top AI chip manufacturers around the world are facing a new reality. Experts believe that DeepSeek’s success serves as a warning signal to Silicon Valley companies, and it could bring about even greater changes in the tech market in the future.
