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What is DeepSeek, and why did it cause the markets and U.S. tech giants to quake? Cade Metz, a technology reporter for The New York Times who writes about artificial intelligence, explains.
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None more nervous than Nvidia, though, whose market cap plummeted in response to the hype over DeepSeek. According to Bloomberg, Nvidia lost a record $569 billion at the start of the week. Companies like Siemens Energy and Oracle also saw their stock prices fall.
Why the hype over DeepSeek?
DeepSeek is an AI tool that's currently available free of charge on the web. You can check it out yourself at chat.deepseek.com, although registration is temporarily on hold due to the recent surge in interest.
Not only was DeepSeek developed by a Chinese startup in just a few months, it apparently uses significantly fewer resources. Although it's reminiscent of OpenAI's ChatGPT, it's based on its own large language model called — you guessed it — "DeepSeek," now version 3.
According to some initial impressions, DeepSeek outperforms the competition for many features, including the generation of textual answers and the prompt-based creation of images. The latter is possible with an additional app called Janus P
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Obsessed with throwing money and resources at AI in any way they can, the likes of OpenAI, NVIDIA, Google and Amazon all just got a surprise.
Out of seemingly nowhere, Chinese AI assistant DeepSeek is suddenly the top-rated free app on Apple's App Store in the US and elsewhere, beating more familiar names, like ChatGPT. The open-source DeepSeek V3 model reportedly requires far less computing power than its competitors and, depending on who you believe, was developed for under $6 million. Shocks all around — especially for OpenAI and all the billions it has floating around.
Focusing on coding and research, DeepSeek's models are similar to other AI assistants you've heard of. Its first DeepSeek-R1 release is available under an MIT license, so it can be used commercially without restrictions.
How does it compare with the far pricier US rivals now China is unable to import the most powerful AI chips? Well, to start with, DeepSeek's founder Liang Wenfeng reportedly stockpiled NVIDIA A100 chips before the US export ban and is pairing those with less powerful chips from China. An MIT Review report also suggests the side effect of the US sanctions are innovations that focus on efficiency and collaboration.
All the attention and a small financial market wobble has put DeepSeek in the crosshairs for "large-scale malicious attacks." Those cyberattacks mean new user registration may be slow, so if you're intrigued, you'll have to wait to check it out.
— Mat Smith
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