DeepSeek: The Chinese AI app making headlines.
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DeepSeek has taken the world by storm. What do we know about the app? DeepSeek, a Chinese-made artificial intelligence (AI) model, has topped the Apple Store for downloads, surprising investors and sending some tech companies into a tailspin.
Launched on January 20, it quickly impressed AI experts before capturing the attention of the entire tech industry — and the world.
US President Donald Trump said it was a "wake-up call" for American companies to focus on "competing to win."
What makes DeepSeek so special is that the company says it was built at a fraction of the cost of industry-leading models like OpenAI — because it uses fewer advanced chips. The possibility caused chip giant Nvidia to lose almost $600 billion (£482 billion) in share value on Monday, the biggest one-day loss in US history.
DeepSeek also raises questions about Washington's efforts to curb Beijing's push for technological superiority – one of the main restrictions has been a ban on the export of advanced chips to China.
However, Beijing has doubled down, with President Xi Jinping declaring AI a top priority. Startups like DeepSeek are essential as China moves from traditional manufacturing – clothes and furniture – to cutting-edge technology – chips, electric vehicles and AI.
So what do we know about DeepSeek? China's DeepSeek AI shakes up industry, damages America's image
What is artificial intelligence? AI can sometimes make a computer look like a person.
A machine uses this technology to learn and solve problems, typically by training on massive amounts of data and pattern recognition.
The end result is software that can have human-like conversations or predict people's shopping habits.
In recent years, it has become more well-known as the technology behind chatbots like ChatGPT - and DeepSeek - also known as generative AI. These programs learn from large volumes of data, including text and images from the Internet, to create new content.
But these tools can create falsehoods and often replicate the biases embedded in their training data.
Millions of people use tools like ChatGPT to help with everyday tasks like writing emails, summarizing text, and answering questions — and others even use them to help with coding and basic research.
What is DeepSeek? DeepSeek is the name of a free AI chatbot that looks, works, and behaves a lot like ChatGPT. This means it is used for many similar tasks, although its effectiveness compared to its rivals is in question.
The AI model that powers DeepSeek – known as R1 – is said to be as powerful as the OpenAI o1 model behind ChatGPT when performing tasks such as math and coding.
Like many other Chinese AI models – Baidu's Ernie or ByteDance's Doubao – DeepSeek was trained to avoid politically sensitive questions.
When the BBC asked the app what happened in Tiananmen Square on June 4, 1989, DeepSeek did not provide details about the massacre, a taboo subject in China.
It replied: "Sorry, I can't answer that question. "I'm an AI assistant designed to provide useful and harmless answers."
Chinese government censorship has been seen as a major challenge to AI development. But DeepSeek appears to have been trained on an open-source model, allowing it to perform complex tasks while retaining some information.
And it claims to have managed to do so on a shoestring, with the researchers saying the training cost $6m (£4.8m) – although the development cost beyond training the model is unknown.
It's still unclear exactly how they did it. DeepSeek's founder is said to have stockpiled Nvidia A100 chips, which have been banned from export to China since September 2022. Experts believe that this collection — which some estimates put at 50,000 — led him to build such a powerful AI model, combining these chips with cheaper, less sophisticated chips.
Who is behind DeepSeek? DeepSeek was founded in December 2023 by Liang Wenfeng and released its first large-scale AI language model the following year.
Not much is known about Liang, who graduated from Zhejiang University with degrees in electronic and computer engineering. But now he is in the international spotlight. He was recently seen at a meeting hosted by Chinese Premier Li Qiang, reflecting DeepSeek's growing importance in the AI sector.
Unlike many American AI entrepreneurs from Silicon Valley, Mr. Liang also has a background in finance.
He is the CEO of a hedge fund called High-Flyer, which uses AI to analyze financial data to make investment decisions — known as quantitative trading. In 2019, High-Flyer became the first quantitative hedge fund in China to raise more than 100 billion yuan ($13 million).
In a speech that year, Mr. Liang said, "If the United States can develop its own quantitative trading industry, why can't China?"
In a rare interview last year, he said that China's AI industry "cannot be a follower forever." He continued: "We're saying there's a gap of one or two years between Chinese AI and American AI, but the real gap is between the original and the copycat. Unless that changes, China will always be a follower."
Asked why DeepSeek's model surprised so many in Silicon Valley, he said: "The surprise comes from seeing a Chinese company joining their game as an innovator, not just a follower — something that most Chinese companies have learned to do."
Australia's science minister has raised questions about the app's safety.
"There are a lot of questions that need to be answered over time about quality, consumer preferences, data management and privacy," Ed Husic told the ABC.
"I would be very careful about that. These kinds of questions need to be weighed carefully."
How are American companies affected? DeepSeek's achievements challenge the belief that bigger budgets and high-end chips are the only ways to advance AI, a view that has created uncertainty about the future of high-end chips.
"DeepSeek has shown that cutting-edge AI models can be developed with limited computing resources," said Wei Sun, principal AI analyst at Counterpoint Research.
"In contrast, OpenAI, valued at $157 billion, is facing intense scrutiny over its ability to maintain a dominant innovation advantage or justify its massive valuation and spending without generating meaningful returns.
On January 27, the company's potentially lower costs rattled financial markets, sending the tech-heavy Nasdaq index down more than 3% as part of a broad sell-off that has hit chipmakers and data centers around the world.
Nvidia appears to have been hit hardest, with its share price down 17% on the day.
The chipmaker was the world's most valuable company, measured by market capitalization, but fell to third place behind Apple and Microsoft on Monday as its market value fell from $3.5 billion to $2.9 billion, Forbes said.
China celebrates DeepSeek's impact
The rise of DeepSeek is a major boost for the Chinese government, which is seeking to build technology independent of the West.
While the Communist Party has yet to comment, Chinese state media has been quick to point out that Silicon Valley and Wall Street giants are "losing sleep" over DeepSeek, which is "demolishing" the US stock market. "In China, DeepSeek's progress has been hailed as a testament to the country's technological growth and autonomy," says Marina Zhang, an associate professor at the University of Technology Sydney.
"The company's success is seen as a testament to China's Innovation 2.0, a new era of local technological leadership led by a new generation of entrepreneurs."
But she also warned that this sentiment could also lead to "technological isolationism."
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