DeepSeek’s Astonishing Surge: The Chinese AI Revolution Shaking Global Tech and Redefining the U.S.-China Power Struggle

DeepSeek’s Rise: A Game-Changer in AI and Its Impact on Global Tech

A Chinese-made artificial intelligence (AI) model called DeepSeek has shocked the world of tech by suddenly becoming the best seller in the download charts from the Apple Store, sending a ripple effect throughout financial markets and overall tech stocks around the globe. Launched on January 20, 2025, DeepSeek quickly gained wings and momentum for AI fanatics and soon to the rest of the world of tech.

Former U.S. President Donald Trump called the rise of DeepSeek a “wake-up call” for U.S. companies, urging them to focus on “competing to win.” What makes DeepSeek stand out is its claim to develop cutting-edge AI at a fraction of the cost of models from industry leaders like OpenAI. DeepSeek accomplishes this by utilizing less advanced chips, and thus Nvidia, the chip-making giant, loses nearly $600 billion of its market value, the largest one-day drop in U.S. history.

DeepSeek’s success raises questions over the U.S.-China tech rivalry, particularly in light of the U.S. export ban on advanced chips to China. Still, Beijing is doubling down on its push for tech supremacy as President Xi Jinping declared AI a top priority.

What is DeepSeek?

DeepSeek is free, AI chatbot similar to ChatGPT, doing maths, coding, and general conversations. It is powered by R1, an AI model that is said to be as capable as OpenAI’s GPT-3. However, DeepSeek’s Chinese origin means it is designed to avoid politically sensitive topics, such as the Tiananmen Square Massacre, a subject heavily censored in China. When asked about it, DeepSeek replied, “I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses.”

Despite these limitations, DeepSeek’s performance has wowed many, and it was reportedly trained at a cost of just $6 million, much cheaper than competitors like OpenAI. Experts say that DeepSeek’s founder stockpiled Nvidia A100 chips (banned from export to China since September 2022) and paired them with cheaper, less sophisticated chips to create a powerful AI model.

Who is Behind DeepSeek?

Liang Wenfeng, the founder of DeepSeek, founded the company in December 2023. Liang, who graduated from Zhejiang University with degrees in electronic information engineering and computer science, is also the CEO of a hedge fund called High-Flyer. This fund uses AI for quantitative trading. Liang’s venture into AI follows his vision for China to no longer “remain a follower” in the global tech race. He opines that China can bridge the gap between originality and imitation in AI space.

Liang’s leadership has positioned DeepSeek in such a stage that it is now becoming one of the serious innovators in AI. His presence at a recent meeting hosted by China’s Premier Li Qiang further signifies DeepSeek’s growing importance in China’s tech ecosystem.

Impact on US Tech Companies

The shockwaves of the victory of DeepSeek had its effects on U.S. companies, and one such major casualty was Nvidia whose stock price fell as far as 17%. This made Nvidia the most-valued company in the world go from a market capitalization standing at $3.5 trillion to $2.9 trillion.

Experts, including Wei Sun of Counterpoint Research, say DeepSeek’s capacity to build robust AI with low-cost chips discredits the notion that AI can only be developed with high-end chips and significant funding. OpenAI, which is valued at $157 billion, is among the companies under increasing pressure to explain their valuations.

China’s Growing AI Prowess

DeepSeek is one milestone to a great height to the ambition of China’s rise to global leadership in technology. The “Innovation 2.0” era of the country combines homegrown innovation efforts led by younger entrepreneurs such as Liang. However, while state media of China hails DeepSeek as an affirmation of the country’s rising technological independence, experts say that this might also fuel isolationism in tech, and China will rise further on its route of being highly dependent in making AI.

DeepSeek’s rise is a bold statement in the AI industry, not only challenging global norms but also shifting the balance of power in the U.S.-China tech rivalry. As the world watches, questions around AI innovation, chip shortages, and tech censorship will only become more pressing, setting the stage for the next chapter in the global tech race.

SOURCE : BBC

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