DeepSeek News LIVE: Chinese 'DeepSeek a wake-up call for US AI...
Chinese AI startup DeepSeep has made a rapid rise in the world of artificial intelligence with its V3 and R1 models. Not only can DeepSeek's models compete with their western counterparts on almost all metrics, they are built on a fraction of a cost and are trained with help from an older Nvidia chip. DeepSeek recently took over OpenAI's ChatGPT as the top free app on the Apple App Store in US and a number of other countries. The free AI app is also expected to put a dent in the market share of top US AI firms and might lead to significant price reduction.
Why is US worried about DeepSeek?
DeepSeek's LLMs are built on a much lower cost and puts into question the ongoing belief that running AI models requires increasing amounts of computing power. In a paper last month, DeepSeek researchers stated that the V3 model leveraged the Nvidia H800 chips for training and incurred a cost of less than $6 million, a miserly sum compared to the billions that AI giants like Microsoft, Meta, and OpenAI have committed to spend this year alone. Moreover, the success of DeepSeek has also called into question the effectiveness of export curbs on advanced AI chips, a policy put in place by the Biden administration to slow down the growth of artificial intelligence in its adversarial countries.
Market Impact
Meanwhile, S&P 500 and Nasdaq futures steadied after Monday's sharp losses, driven by Chinese AI startup DeepSeek's launch of low-cost, advanced AI models. Nvidia rebounded 3.5% in premarket trading following a record $593 billion market value loss. Other AI-linked stocks like Oracle and Broadcom gained, partially recovering after Nasdaq's 3% drop and S&P 500's 1.5% decline. For more details, click here.
Expert Analysis
As the social media platforms and the stock markets are buzzed with the popularity of the new AI company DeepSeek, a report by Bernstein stated that DeepSeek looks fantastic but not a miracle and not built in USD 5 million. It stated that "we believe that DeepSeek DID NOT "build OpenAI for USD 5M"; the models look fantastic but we don't think they are miracles; and the resulting Twitter-verse panic over the weekend seems overblown."
Almost AUD 1 trillion (USD 600 billion) was wiped off the value of artificial intelligence microchip maker Nvidia overnight on Monday when a little-known Chinese startup, DeepSeek, threatened to upend the US tech market.
US Response
US Press Secretary Karoline Leavitt while talking about DeepSeek, a Chinese artificial intelligence company that develops open-source large language models, said that as per US President Trump, this is a wake-up call for American AI. "The President was asked about DeepSeek last night on Air Force 1 when he gaggled for the third or fourth time throughout the weekend with members of the traveling press corps. The President said that he believes that this is a wake-up call to the American AI industry. The last administration sat on their hands and allowed China to rapidly develop this AI program," she said.
Industry Insights
DeepSeek News Live: Shankar Sharma, founder of GQuant and FirstGlobal, sparked controversy on X after praising China’s structural edge over the US, implying the global rise of Chinese AI platform DeepSeek. In his post, Sharma criticized American figures like Trump, Musk, and Andreessen, urging the US to “become humble." While some supported Sharma’s boldness, others criticized his comments as divisive, questioning whether his negative stance on the US was based on reason or personal bias. To read more, click here.
