DeepSeek's AI app is available for download in Apple's App Store and online at its website.
Zhejiang, China: “One of the most amazing and impressive breakthroughs in AI,” is how Silicon Valley venture capitalist Marc Andreessen described DeepSeek’s R1 model, the AI-powered, cost-effective chatbot by the Chinese company that sent financial markets into a spin and stocks to plummet.
The Chinese competitor shook Wall Street with Nvidia losing 17 percent of its stocks while the Nasdaq composite went down by 2.8 percent. Despite that, Nvidia called DeepSeek “an excellent AI advancement.” US-based Nvidia makes the powerful chips that run AI.
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DeepSeek became the most downloaded free app on Apple’s store since its release in January in the US, even overtaking rival ChatGPT.
According to the company, its latest AI models are on par with industry-leading models in the US, including ChatGPT, at a fraction of the cost.
US president Donald Trump considered the event a “wake-up call” for US firms.
What Is DeepSeek?
DeepSeek’s R1 is an open-source reasoning model that has outperformed the best models from US companies, including Sam Altman’s OpenAI, according to reports. The Chinese firm’s self-reported training cost was less than $6 million, a fraction of the billions Silicon Valley is spending to build their AI models.
This month alone, Microsoft announced it was spending $80 billion on AI infrastructure in 2025. Meta CEO Mark Zuckerberg declared that his company is planning to invest somewhere near $60 to $65 billion in capital expenditures this year to improve its AI.
Questions have now arisen over if multi-billion dollar investments from tech giants like Microsoft, Google, and others for Nvidia’s AI infrastructure are a waste of money since the same results are being achieved with a fraction of the massive amount.
DeepSeek’s AI app is available for download in Apple’s App Store and online at its website
Liang Wenfeng, the Founder of DeepSeek
40-year-old Liang Wenfeng is an information and electronic engineering graduate who reportedly built a store of Nvidia A100 chips and is now banned from export to China. According to experts, this collection led him to launch DeepSeek by pairing these chips with cheaper, lower-end ones that are still available to import.
Owned by AI-driven hedge fund in China, High Flyer, DeepSeek is a Hangzhou-based startup. Liang Wenfeng is the controlling shareholder and also the co-founder of High Flyer, according to Chinese corporate records.
According to reports, although it is unclear how much High Flyer has invested in DeepSeek, the former has an office located in the same building as DeepSeek. High Flyer also owns patents related to chip clusters used to train AI models, based on Chinese corporate records.
Why Has DeepSeek Shaken the AI Industry?
The Chinese-based AI chatbot rose to popularity for its ‘efficient’ responses. Although AI assistants operate similarly to ChatGPT, according to users, DeepSeek gives the writing more personality.
DeepSeek has rolled out a free assistant that uses lower-cost chips and less data. This challenges a widespread bet in financial markets that artificial intelligence will drive demand along a supply chain from chipmakers to data centres.
Since DeepSeek was reportedly developed for a fraction of the cost of its rivals in the US, the Chinese AI chatbot has raised doubts about America’s dominance in the future of artificial intelligence.
DeepSeek also uses less advanced semiconductor chips than the ones created by Nvidia.
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The new AI chatbot’s success has broken the belief that bigger investments and top-tier chips are necessary for advancing AI. The event has now triggered uncertainty over the need for and the future of high-performance chips.
Nvidia lost roughly $600 billion in market value on Monday. It is the largest one-day drop for any company in American history. Notably, the company had been the most valuable company in the world (in terms of market capitalisation).
However, after Monday’s performance, Nvidia fell to third place after Apple and Microsoft. According to Forbes, its market value shrank from $3.5 trillion to $2.9 trillion.
