Chinese startup DeepSeek has made waves in the tech world after its AI assistant became a top-rated free app in the U.S. App Store. This surge in popularity, however, led to temporary registration limits and website outages.

The issues were related to its application programming interface and login problems. These have now been resolved, according to the company's status updates.

Launched on January 10, 2025, DeepSeek's AI assistant quickly became a key player in artificial intelligence. The company claims its AI model, DeepSeek-V3, offers significant advantages over existing technologies in both cost and data efficiency.

DeepSeek achieved this by using Nvidia’s H800 chips, which are less powerful than some of the highest-end models. Despite this, the company has achieved cutting-edge performance at a fraction of the cost of its competitors.

The AI model’s effectiveness has been recognized by many in the tech industry. Silicon Valley has praised DeepSeek for its innovation, and some experts suggest it could disrupt the U.S. dominant AI market.

DeepSeek has caused concern among tech investors, leading to a significant drop in shares of major U.S. tech companies. Nvidia, for example, saw its market value plummet by $593 billion in a single day. This was driven by fears that DeepSeek’s success could undermine demand for high-end chips.

Founded in 2023, DeepSeek is a relatively unknown entity. Based in Hangzhou, China, the company has gained attention for outperforming U.S. rivals, traditionally seen as the gold standard for AI innovation.

One key factor in DeepSeek’s success is its low training costs. The company spent less than $6 million on training the DeepSeek-V3 model. This is significantly cheaper than the resources required by US firms.

This efficiency has raised questions about the effectiveness of U.S. export controls on China’s access to advanced chip technologies.

Marc Andreessen, a well-known Silicon Valley venture capitalist, referred to DeepSeek’s launch as AI’s “Sputnik moment.” This reference to the Soviet Union’s satellite launch in 1957 highlights the profound impact DeepSeek could have on the global tech landscape.

DeepSeek’s open-source nature also makes it more accessible to a wider audience. As its AI models gain traction, the future of the AI industry remains uncertain.

Some experts argue that if DeepSeek can maintain its performance while reducing costs, it could significantly alter the competitive dynamics in the global AI market.

Investors are carefully watching the company’s next moves. Its success could represent a paradigm shift or a temporary disruption in the AI space.

While DeepSeek's rise has caused concerns among U.S. tech companies, it also represents an opportunity for more efficient AI solutions.

As the debate around export controls and chip scarcity continues, DeepSeek’s success emphasizes the growing competition in AI. Chinese companies are now playing a more significant role in shaping the future of technology.

SOURCE: REUTERS | PHOTO: GETTYIMAGES

This article was created with AI assistance.