China-based artificial intelligence startup DeepSeek has surpassed ChatGPT to become the most downloaded free app on the App Store in the US, just two weeks after its official launch. This success of DeepSeek attracted attention in many countries, including the USA, and brought global competition in the field of artificial intelligence back to the agenda.
DeepSeek offers a powerful artificial intelligence solution powered by the DeepSeek-V3 model. According to data from application analytics firm Sensor Tower, this model claims to outperform the most advanced artificial intelligence models worldwide. Founded in 2023 by hedge fund manager Liang Wenfeng, DeepSeek spent less than $6 million to train the model with 671 billion parameters, using only 2,048 NVIDIA H800s; This figure is well below what OpenAI and Google spend.
These developments raise many questions about the effectiveness of the US government’s advanced chip export restrictions on China. Both ChatGPT and DeepSeek need these chips to train their AI models. Before the Trump era, the Biden administration imposed strict rules on high-tech chip exports to China. But DeepSeek appears to have found a way to train its models with less advanced chips than the banned versions. Some experts question the veracity of DeepSeek’s claims about the chips.
Other Chinese companies, such as Baidu, are also developing artificial intelligence models. But DeepSeek’s rapid success in the US sets it apart from its competitors. Renowned venture capitalist Marc Andreessen calls DeepSeek “one of the most surprising and impressive inventions I’ve ever seen.”
Big blow to NVIDIA shares
Tech leaders in Silicon Valley are carefully monitoring DeepSeek’s success and its impact on the global AI scene. The success of the initiative led technology investors to sell their shares, causing major declines in the shares of major artificial intelligence companies such as NVIDIA and Oracle.