News Break
Shares in leading US technology companies, including AI chip-maker Nvidia, Microsoft, and Meta, experienced a significant decline on Monday following the rapid rise of a low-cost chatbot developed by Chinese artificial intelligence (AI) firm DeepSeek.
The DeepSeek app, launched just last week, has quickly become the most downloaded free app in the United States, surpassing competitors such as OpenAI’s ChatGPT. This unexpected surge in popularity has raised concerns among investors about the growing competitiveness of Chinese AI technologies in the global market.
In a related development, DeepSeek announced on Monday that it would temporarily limit new user registrations due to “large-scale malicious attacks” on its software. The company did not provide further details about the nature of the attacks but assured users that it is working to resolve the issue promptly.
The Man Behind DeepSeek
DeepSeek was founded by Liang Wenfeng, a 40-year-old information and electronic engineering graduate based in Hangzhou, a city in Southeastern China. Liang, who also established the hedge fund that backed DeepSeek, reportedly amassed a significant stockpile of Nvidia A100 chips—now banned from export to China—before the restrictions took effect.
Experts believe that Liang’s access to these high-performance chips, combined with cheaper, lower-end alternatives still available for import, enabled him to develop DeepSeek’s advanced AI capabilities. Some estimates suggest that Liang’s collection includes as many as 50,000 Nvidia A100 chips, giving DeepSeek a competitive edge in the AI race.
Liang’s influence in the tech industry was further highlighted when he was recently seen attending a meeting between industry experts and Chinese Premier Li Qiang.
Pricing Strategy Sparks Surprise
In a July 2024 interview with The China Academy, Liang expressed surprise at the global reaction to DeepSeek’s pricing strategy. “We didn’t expect pricing to be such a sensitive issue,” he said. “We were simply following our own pace, calculating costs, and setting prices accordingly.”
DeepSeek’s affordable pricing model has been a key factor in its rapid adoption, particularly in the US market, where it has disrupted the dominance of established AI platforms like ChatGPT.
Impact on US Tech Giants
The success of DeepSeek has sent shockwaves through the US tech industry, with investors reacting swiftly to the potential threat posed by the Chinese AI firm. Nvidia, Microsoft, and Meta all saw their share prices drop on Monday, reflecting growing uncertainty about the future competitiveness of US-based AI technologies.
As the global AI landscape continues to evolve, the rise of DeepSeek underscores the increasing influence of Chinese tech firms in shaping the future of artificial intelligence.
What’s Next for DeepSeek?
While DeepSeek’s rapid ascent has been impressive, the company now faces the dual challenge of addressing security concerns and maintaining its competitive edge in a highly dynamic market. For now, the tech world will be watching closely to see how DeepSeek navigates these challenges and whether it can sustain its momentum in the face of growing competition.
This story highlights the shifting dynamics of the global AI industry, where innovation and affordability are becoming key drivers of success.
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