DeepSeek’s rise has caused shockwaves іn the tech world, with major US tech firms like Nvidia experiencing significant market losses. Shares іn Nvidia fell sharply, losing almost $600bn іn market value. The company’s AI model, R1, іs claimed tо be made at a fraction оf the cost оf its rivals, raising questions about the future оf AI dominance іn the US.
Trump’s Comments on the Rise of Chinese AI
President Donald Trump described DeepSeek’s breakthrough as a “wake-up call” for the US tech industry. He noted that if a company could deliver AI models at a lower cost and achieve similar results, it could benefit the US. Despite the concerns, Trump emphasized that the US would remain a dominant player in the field of AI: “If you could do it cheaper, if you could do it [for] less [and] get to the same end result. I think that’s a good thing for us,” he said while aboard Air Force One.
DeepSeek’s Cost-Effective AI Model
DeepSeek’s R1 model has been praised for achieving similar performance to leading AI models like those from OpenAI, yet at a significantly lower cost. The model was reportedly trained for around $6m, far less than the billions spent by its competitors. This has led to questions about the potential to disrupt the AI industry, as DeepSeek’s AI models require far less computing power, making them more affordable and accessible.
Cybersecurity Concerns Surrounding DeepSeek
DeepSeek has raised cybersecurity concerns in several countries. Australia’s science minister Ed Husic called for caution, stating there were many unanswered questions regarding quality, consumer preferences, data, and privacy management. With the rise of DeepSeek, some countries are questioning the security implications of using AI models developed by Chinese firms, especially as the US restricts the sale of advanced chip technology to China.
DeepSeek’s Founder and Its Rapid Growth
Founded in 2023 by Liang Wenfeng, DeepSeek has quickly risen to prominence. The company, based in Hangzhou, China, has become the most downloaded free app in the US within just a week of its launch. Liang, a graduate in information and electronic engineering, also founded the hedge fund that backed DeepSeek. His company’s rapid rise has caught the attention of both supporters, including OpenAI’s Sam Altman, and skeptics like Elon Musk, who have raised doubts about some of the company’s claims regarding the number of Nvidia chips used for training.