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The launch of DeepSeek has rattled the global AI industry, potentially offering a far cheaper alternative to market leaders like OpenAI and Anthropic
Founded in 2023 by former hedge fund manager Liang Wenfeng, DeepSeek has quickly positioned itself as a strong competitor to the likes of OpenAI’s ChatGPT and Microsoft’s CoPilot, having seemingly trained a comparative AI model at a fraction of the usual cost (around $6 million compared to the industry standard of billions).
The launch has brought into question the current US dominance in the sector. By reducing the costs of AI development and deployment, DeepSeek has created an economic advantage for itself in terms of startup and operating costs, but has also challenged the way the AI industry operates, which has the potential to transform the future of AI adoption and accessibility. This is because DeepSeek has proved that advanced models don’t require massive budgets, lowering barriers for new players. If its claims about faster inference speed are true, it may accelerate AI adoption and shift investment away from costly, chip-heavy models
DeepSeek’s own website describes the chatbot as achieving a “significant breakthrough in inference speed over previous models. It tops the leaderboard among open-source models and rivals the most advanced closed-source models globally.”
Both the chatbot release and the slimmer startup costs has caused panic in the global financial markets, especially in the case of chip giant Nvidia, which lost almost $600bn (£482bn) of its market value on Monday, which was the biggest one-day loss in US history. Today, however, stocks have begun to recover, having gained around 2.5% in early trading yesterday. In short statement since the market tumble, Nvidia called DeepSeek “an excellent AI advancement.”
President Trump has responded to the news, calling it “a wakeup call for our industries that we need to be laser-focused on competing to win”.
The success of the launch is also a huge boost for the Chinese AI industry, as technological geopolitical tensions between China and the West continue to rage. Yesterday, China’s state-owned Global Times suggested that the US has failed to halt Chinese progression in the sector, adding, “the Biden administration’s four-year crackdown on China’s AI and computing power has not only failed but has also spurred the country to forge a unique path for AI development.”
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