C hinese AI application DeepSeek has emerged as the highest-rated free app on Apple’s App Store in the United States, the United Kingdom, and China, surpassing competitors like ChatGPT.
Launched in January, DeepSeek has rapidly gained widespread popularity, challenging the notion that the U.S. dominates the global AI sector. The app operates on the open-source DeepSeek-V3 model, which its developers claim was created for less than $6 million—a fraction of the billions spent by its rivals.
Earlier this month, the company introduced DeepSeek-R1, asserting that it delivers performance comparable to one of OpenAI’s latest models in tasks such as mathematics, coding, and natural language reasoning.
The development of advanced AI models like ChatGPT and DeepSeek relies heavily on high-performance chips. Since 2021, the U.S. government has tightened restrictions on the export of advanced chips to China, posing challenges for Chinese AI developers.
In response, Chinese AI firms have collaborated and innovated to reduce their reliance on imported high-end chips. These efforts have resulted in AI models that require significantly less computing power, drastically lowering costs and potentially reshaping the industry.
On Monday, shares of U.S.-based AI companies, including Nvidia, Microsoft, and Meta, experienced declines, reflecting the growing competition from Chinese AI advancements.
DeepSeek was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China. The 40-year-old entrepreneur, who also established a hedge fund that financially backed DeepSeek, reportedly secured a stockpile of Nvidia chips before export restrictions were imposed.
Experts estimate that this collection, comprising approximately 50,000 chips, played a crucial role in launching DeepSeek. By combining these high-end chips with more affordable, exportable models, the company was able to develop its cutting-edge AI technology.
DeepSeek’s rapid rise highlights the increasing competitiveness of China’s AI sector and its ability to innovate despite geopolitical challenges.
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