Introduction: Chinese artificial intelligence (AI) company Deepseek its new AI-powered chatbot in the US market. It is currently the most downloaded free app on the Apple Store, posing a major challenge for US AI companies.
Deepseek success has revolutionized the cost and business model of AI technology. Prominent Silicon Valley Investor Marc Andreessen described it as a 'revolutionary breakthrough' in the AI sector.
What is Deepseek?
Deepseek is a Chinese AI company founded in July 2023 in Hangzhou, a city in Southeast China. Its AI assistant app was released in the US market on January 10, 2025 and took the top spot in the Apple Store within days.
How does Deepseek outperform its competitors?
Deepseek s construction costs are much lower than those of its US rivals. While US companies have invested hundreds of millions of dollars, DeepSec has spent just $6 million to develop its AI models.
Founder Liang Wenfeng and the technology strategy:
Deepseek co-founder Liang Wenfeng is an IT expert who used his own hedge fund money to build the company. He is said to have acquired about 50,000 A-100 chips from US company Nvidia, which are currently banned from export to China. He combined these chips with other low-cost chips to create powerful AI.
Reasons for Deepseek popularity
– Free download: It is available for free from the Apple Store and website.
– Powerful AI assistant: It works like a chatbot, answering users’ questions and helping them improve their writing quality.
– Advanced technology at low cost: DeepSec’s affordable production cost keeps it ahead of the competition.
Deepseek limitations and political implications
As a Chinese-owned company, it avoids politically sensitive topics. For example, it refused to answer questions about the 1989 Tiananmen Square incident. Why are US companies like Nvidia hurt?
The success of Deepseek has been a major blow to the US AI market. In particular, US chipmaker Nvidia has been hit the hardest. Because it cost far less to develop Deepseek than it did to develop US-based AI apps
- On January 27, Nvidia's shares fell sharply, wiping $600 billion off the company's market value—the biggest loss for a company in a single day in US history.
– Nvidia was once the world’s most valuable company, but this shock dropped them to third place behind Microsoft and Apple.
The future of AI technology and market changes:
It was long thought that big budgets and cutting-edge chips were essential to create powerful AI. But Deepseek success has challenged this idea.
Experts believe that the future of AI technology and the market may now take a new turn, where advanced technology will also become important, as well as affordable solutions.
