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An AI-powered chatbot from Chinese company DeepSeek quickly became the most downloaded free app on Apple’s store, following its January release in the United States.
The sudden popularity of the app, along with DeepSeek’s seemingly low costs compared to those of U.S.-based AI companies, sent financial markets into a tailspin.
Silicon Valley venture capitalist Marc Andreessen hailed DeepSeek as “one of the most astonishing and impressive advancements” in AI.
The company says its latest AI models are comparable to industry-leading models in the United States – like ChatGPT – at a fraction of the cost.
The researchers behind the app said it took just $6m (£4.8m) to build it, far less than the billions spent by AI companies in the UNITED STATES.
What is DeepSeek?
DeepSeek is a Chinese artificial intelligence company founded in Hangzhou, a city in southeastern China.
The company was launched in July 2023 by Liang Wenfeng and financed by the Chinese entrepreneur’s hedge fund.
It was released in the United States on January 10, according to Sensor Tower.
Wenfeng is said to have built up a stockpile of Nvidia A100 chips – which some estimates put at 50,000 – whose export to China is now banned.
Experts believe this collection allowed it to launch DeepSeek, combining powerful chips with cheaper, low-end chips that are still available for import.
Who uses it?
The company’s AI application is available for download on the Apple App Store and online on its website.
The service, which is free, has quickly become the most downloaded app on Apple’s store, although there have been reports of people having difficulty signing up.
It also became the highest-rated free app in the United States on the Apple App Store.
What does the app do?
DeepSeek became popular due to its powerful AI assistant that works similar to ChatGPT.
According to its description on the App Store, it’s designed “to answer your questions and effectively improve your life.”
Comments left by users rating the app say “it gives more personality to the writing.”
DeepSeek’s low cost raises concerns for the future of AI in the United States
DeepSeek was reportedly developed for a fraction of the cost of its competitors, raising questions about the future of U.S. AI dominance and the scale of investments U.S. companies are considering.
The company behind ChatGPT – OpenAI – is a global leader in this growing field and Nvidia has become one of the most valuable companies in the world, measured by market capitalization. OpenAI CEO Sam Altman joined financial and other firms at a White House event last week, where they pledged to invest $500 billion (£400 billion) in construction of AI infrastructure in the United States.
There is no definitive report on how much it cost to create ChatGPT, but based on reporting from The Information, many estimate that it took $540 million, almost 100 times the cost of DeepSeek.
DeepSeek’s potentially lower costs shook financial markets on Jan. 27, sending the tech-heavy Nasdaq down more than 3%. Nvidia was down more than 12% on the morning of January 27. Microsoft lost about 4% and Oracle lost more than 7%.