Explained: Why China's DeepSeek is Redefining the AI Landscape

The artificial intelligence (AI) industry is abuzz with the emergence of DeepSeek, a Chinese AI model that is not just competing with but surpassing established leaders like OpenAI’s ChatGPT, Gemini, and Anthropic’s Claude AI.

What is DeepSeek?
Developed by a Hangzhou-based research team led by Liang Wenfeng, DeepSeek first gained traction in 2023. Its flagship model, DeepSeek-V3, climbed to the top of Apple's App Store rankings in multiple countries, including the US, UK, and China.

Its latest iteration, DeepSeek R1, offers high performance while remaining cost-efficient and open source—key factors setting it apart from its competitors. Unlike many proprietary models that come with hefty price tags and resource-intensive requirements, DeepSeek provides free, unlimited access, making it a disruptive force in the AI industry.

What Sets DeepSeek Apart?
DeepSeek distinguishes itself through affordability and efficiency. While giants like OpenAI and Meta rely on expensive AI chips, such as Nvidia's H100 GPUs, DeepSeek’s innovative approach enables similar performance with significantly reduced hardware costs.

Another standout feature of DeepSeek’s chatbot is its ability to articulate reasoning before responding—a functionality not typically available in competing models. This transparency, combined with its open-source availability, has endeared DeepSeek to developers and tech enthusiasts alike.

The Buzz Around DeepSeek
DeepSeek’s rise is particularly significant given the US's semiconductor export restrictions on China. By designing models that require fewer advanced resources, DeepSeek has circumvented these barriers, gaining an edge in the global AI market.

This accessibility and innovation have led to heightened concern among US tech leaders. Companies like Nvidia, Meta, and Microsoft are feeling the competitive pressure, as the affordability of DeepSeek may disrupt the economics of AI infrastructure.

Impact on Markets
DeepSeek’s success has already impacted US stock markets. Shares of Nvidia, Meta, and Microsoft dipped following its rise, as investors brace for a shift in the AI landscape. Analysts warn that the proliferation of cost-efficient AI models could reshape the strategies of established tech players, forcing them to lower costs or risk losing their market dominance.

As DeepSeek continues to gain traction, it exemplifies how innovative approaches in AI can democratize access while challenging industry norms.