The price of some tech stocks has continued falling on Asian markets as a result of the release of a low-cost AI chatbot which launched last week. It has overtaken rivals including ChatGPT to become the most downloaded free app in the United States.
The DeepSeek app was reportedly developed for a fraction of the cost of its rivals, raising questions about the future of America’s AI dominance and the scale of investments US firms are planning.
Its emergence, which has been hailed as a “Sputnik moment”, caused some tech shares and stocks to tumble – including the US chipmaker Nvidia which suffered the biggest single-day loss in Wall Street history.
Only a few hours ago US President Donald Trump referenced DeepSeek’s breakthrough during an address to Republican congressmen and women in Miami.
He hailed the breakthrough as positive news and suggested it is a “wake-up call” for the US tech industry.
Chinese internet hails “AI heroes”
The Chinese internet has been excited by DeepSeek’s shoot-to-fame since the weekend.
It’s been a while since there has been good news for Chinese tech – the noises around TikTok and its parent company ByteDance, a Chinese-owned company, have overshadowed the industry’s glory to international audiences for a long time.
But now the Chinese feel vindicated. At this holiday season of Lunar New Year, the biggest holiday for Chinese, the most trending topics on Chinese social media are about AI and DeepSeek.
This morning, on popular social media platform Weibo, many top-trending hashtags are related to the AI tool. The topic “What is DeepSeek ” has generated more than 11 million views, with state broadcaster CCTV’s post on this leading the discussion.
Other trending hashtags include “the three AI heroes from Guangdong” – DeepSeek’s founder Liang Wenfeng is one of them, and “Hangzhou six little dragons” – a phrase to describe the six star new tech companies that are based in the city of Hangzhou.
“DeepSeek shows us that only if you have the real deal will you stand the test of the times,” a top-liked Weibo comment reads. “This is the best new year gift. Wish our motherland prosperous and strong,” another reads.
In a post on X, ChatGPT’s Sam Altman calls DeepSeek’s latest offering “an impressive model, particularly around what they’re able to deliver for the price”.
But he emphasises that OpenAI believes greater computing power is key to the success of its own model.
He says: “we will obviously deliver much better models and also it’s legit invigorating to have a new competitor! we will pull up some releases.”
Altman made his fortune by investing in huge tech start-ups like Reddit and Airbnb, before turning his attention to artificial intelligence.
He created and still helms OpenAI’s ChatGPT – a large language model that passed one million users in less than a week when it was launched in 2022.
How DeepSeek is different than other AI apps
DeepSeek has been hailed for being low-cost compared to other AI chatbots.
It works by activating only the most relevant parts of its model for each query it receives, which saves money and computation power.
The model has been praised by some. Tech investor Marc Andreessen wrote on X shortly after the DeepSeek app’s launch that it is “one of the most amazing and impressive breakthroughs” he has seen in open source AI, calling it “a profound gift to the world”.
Aside from the way it processes data, DeepSeek appears to be relatively similar to other AI chatbots on the market, like ChatGPT, making it a legitimate rival to these applications.
Its emergence has upended Wall Street, and has raised questions in the US on whether Silicon Valley is overspending on tech advancements in the AI sector.
But politically sensitive questions cause DeepSeek to literally censor its own responses. When asked what happened at Tiananmen Square on June 4, 1989, DeepSeek replied: “I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses.”
DeepSeek targeted by ‘malicious attacks’
DeepSeek – the low-cost chatbot built by a Chinese AI firm – had limited new user registrations due to “large-scale malicious attacks”.
The company said registrations have been temporarily limited to ensure continued service to those who have already signed up. Existing users can log in as usual, it said.
Since then, the firm has not provided any update on the status of its services, or any information on the origin of the attacks.
