What Is DeepSeek, The Chinese AI Model Causing Stock Market Chaos?
If you woke up this morning and checked the stock markets, you would have seen that it has been thrown into utter chaos with US stocks plummeting as traders left the tech sector and reportedly erased over US$1 trillion in market cap.
The culprit? A new AI model by Chinese startup DeepSeek which claims to rival OpenAI and has become the number one downloaded free app on Apple’s iPhone store.
What Is DeepSeek?
DeepSeek is an AI startup that was founded in 2023 in Hangzhou, China. It released its first AI large language model late in 2023. About a month ago, DeepSeek began getting more significant attention after it released a new AI model, DeepSeek-V3, that it claimed was on par with OpenAI and that was more cost-effective in its use of Nvidia chips to train the systems.
However, DeepSeek only started getting significant traction last week when it released a follow-up research paper that detailed another DeepSeek AI model called R1 which showed more advanced reasoning skills and that was significantly cheaper compared to OpenAI’s o1 model.
Why Is It Causing A Buzz Now?
DeepSeek's affordability and performance have caught the attention of the industry. Developers claim to have built it at a significantly lower cost compared to similar API models, disrupting the status quo and potentially democratizing access to advanced AI technology.
This innovation is challenging established players like OpenAI, Microsoft, and Google, and could lead to a shift in industry pricing as businesses look to adopt more cost-effective AI solutions.
Why Could DeepSeek Become A Political Issue?
Beyond pricing, DeepSeek's emergence could create political tensions, especially as the United States grows wary of sharing information with Chinese companies. Concerns around data privacy, bias, and ethics have been raised, echoing previous issues with Chinese tech companies.
There are also concerns about the origins of DeepSeek's models and potential misuse of technology for malicious purposes. As the AI race intensifies, tighter restrictions on Chinese AI companies and technologies could be imposed by US and Western countries.
Conclusion
Users are advised to carefully consider data privacy implications before using DeepSeek, as the technology landscape evolves and potential risks increase.
