The Chinese startup DeepSeek released its flagship AI exemplary R1 connected January 20, surprising Silicon Valley pinch the model's precocious capabilities. R1 matched aliases surpassed the functionality of AI released by OpenAI, Google, and Meta — connected a overmuch smaller fund and without the latest AI chips.
Over the past week, the DeepSeek app has proven celebrated pinch the public. It surged past ChatGPT successful popularity, reaching No. 1 connected the U.S. Apple app store and wrong the top free Android apps connected the Google Play Store astatine the clip of publication.
DeepSeek's R1 merchandise has prompted questions astir whether the billions of dollars of AI spending successful the past fewer years was worthy it — and challenged the conception that the U.S. is the world's leader successful AI, per BBC.
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DeepSeek's AI arrives arsenic the U.S. looks to ramp up spending connected AI. Last week, President Donald Trump announced a associated task pinch OpenAI, Oracle, and Softbank called Stargate that commits up to $500 cardinal complete the adjacent 4 years to information centers and different AI infrastructure.
What is DeepSeek?
DeepSeek is simply a Chinese AI startup that creates open AI models—so immoderate developer tin entree and build connected the technology.
DeepSeek is different from ChatGPT because it states its chain-of-thought reasoning earlier giving a consequence to a prompt. Apple App Store and Google Play Store reviews praised that level of transparency, per Bloomberg.
It is free to download and use, though it does require users to motion up earlier they tin entree the AI.
DeepSeek AI. Photographer: Andrey Rudakov/Bloomberg via Getty Images
How overmuch did DeepSeek costs to develop?
In a paper released past month, DeepSeek researchers stated that they built and trained the AI exemplary for nether $6 cardinal successful only 2 months.
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They stated that they utilized astir 2,000 Nvidia H800 chips, which Nvidia tailored exclusively for China pinch little information transportation rates, aliases slowed-down speeds erstwhile compared to the H100 chips utilized by U.S. companies. In October, the U.S. Department of Commerce banned the waste of the H800 chip to China pinch the extremity of preventing entree to chips that could substance AI breakthroughs, particularly for subject purposes.
In contrast, Dario Amodei, the CEO of U.S AI startup Anthropic, said successful July that it takes $100 cardinal to train AI — and location are models coming that costs person to $1 cardinal to train.
So really did DeepSeek propulsion up of the title pinch less resources? Meta's main AI intelligence Yann LeCun stated successful a Threads post connected Saturday that DeepSeek had "profited from unfastened investigation and unfastened source."
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"They came up pinch caller ideas and built them connected apical of different people's work," LeCun stated. "Because their activity is published and unfastened source, everyone tin profit from it."
Why is DeepSeek truthful popular?
DeepSeek is free and offers top-of-the-line performance. Last week, the technological diary Nature published an article titled, "China's cheap, unfastened AI exemplary DeepSeek thrills scientists." The article showed that R1's performances connected definite chemistry, math, and coding tasks were connected par pinch 1 of OpenAI's astir precocious AI models, the o1 model OpenAI released successful September.
In summation to precocious performance, R1 is open-weight, truthful researchers tin study, reuse, and build connected it. It isn't considered afloat unfastened root because DeepSeek hasn't made its training information public.
The AI exemplary has besides received stellar reviews. Investor Marc Andreessen called it "one of the astir astonishing and awesome breakthroughs" he had "ever seen" successful a Friday station connected X while Microsoft CEO Satya Nadella called it "super impressive" astatine past week's World Economic Forum successful Switzerland.
Deepseek R1 is 1 of the astir astonishing and awesome breakthroughs I've ever seen — and arsenic unfastened source, a profound gift to the world. ??
— Marc Andreessen ?? (@pmarca) January 24, 2025What are DeepSeek's effects connected U.S. tech stocks?
Nvidia shares fell by 13% aft the opening doorbell connected Monday, wiping $465 cardinal from the AI chipmaker's marketplace cap. It was the biggest driblet successful worth successful U.S. banal marketplace history, per Bloomberg.
According to NBC News, Microsoft and Alphabet fell 4% each while Meta fell astir 2%.
NBC News besides notes that the Nasdaq Composite fell by 3.4% astatine the opening bell, while the Dow fell 180 points and the S&P 500 fell astir 2%.
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