What is DeepSeek - and why is everyone talking about it?

[Anthea]

What is DeepSeek

DeepSeek has stunned the world - what do we know about it?

A Chinese-made artificial intelligence (AI) model called DeepSeek has shot to the top of Apple Store's downloads, stunning investors and sinking some tech stocks.

Its latest version was released on 20 January, quickly impressing AI experts before it got the attention of the entire tech industry - and the world.

US President Donald Trump said it was a "wake-up call" for US companies who must focus on "competing to win".

What makes DeepSeek so special is the company's claim that it was built at a fraction of the cost of industry-leading models like OpenAI - because it uses fewer advanced chips

That possibility caused chip-making giant Nvidia to shed almost $600bn (£482bn) of its market value on Monday - the biggest one-day loss in US history.

DeepSeek also raises questions about Washington's efforts to contain Beijing's push for tech supremacy, given that one of its key restrictions has been a ban on the export of advanced chips to China.

Beijing, however, has doubled down, with President Xi Jinping declaring AI a top priority. And start-ups like DeepSeek are crucial as China pivots from traditional manufacturing such as clothes and furniture to advanced tech - chips, electric vehicles and AI.

So what do we know about DeepSeek?

What is artificial intelligence?

AI can, at times, make a computer seem like a person.

A machine uses the technology to learn and solve problems, typically by being trained on massive amounts of information and recognising patterns.

The end result is software that can have conversations like a person or predict people's shopping habits.

In recent years, it has become best known as the tech behind chatbots such as ChatGPT - and DeepSeek - also known as generative AI.

These programs again learn from huge swathes of data, including online text and images, to be able to make new content.

But these tools can create falsehoods and often repeat the biases contained within their training data.

Millions of people use tools such as ChatGPT to help them with everyday tasks like writing emails, summarising text, and answering questions - and others even use them to help with basic coding and studying.

DeepSeek is the name of a free AI-powered chatbot, which looks, feels and works very much like ChatGPT

That means it's used for many of the same tasks, though exactly how well it works compared to its rivals is up for debate.

It is reportedly as powerful as OpenAI's o1 model - released at the end of last year - in tasks including mathematics and coding.

Like o1, R1 is a "reasoning" model. These models produce responses incrementally, simulating a process similar to how humans reason through problems or ideas. It uses less memory than its rivals, ultimately reducing the cost to perform tasks.

Like many other Chinese AI models - Baidu's Ernie or Doubao by ByteDance - DeepSeek is trained to avoid politically sensitive questions.

When the BBC asked the app what happened at Tiananmen Square on 4 June 1989, DeepSeek did not give any details about the massacre, a taboo topic in China. It replied: "I am sorry, I cannot answer that question. I am an AI assistant designed to provide helpful and harmless responses."

Chinese government censorship is a huge challenge for its AI aspirations internationally. But DeepSeek's base model appears to have been trained via accurate sources while introducing a layer of censorship or withholding certain information via an additional safeguarding layer.

Deepseek says it has been able to do this cheaply - researchers behind it claim it cost $6m (£4.8m) to train, a fraction of the "over $100m" alluded to by OpenAI boss Sam Altman when discussing GPT-4.

DeepSeek's founder reportedly built up a store of Nvidia A100 chips, which have been banned from export to China since September 2022.

Some experts believe this collection - which some estimates put at 50,000 - led him to build such a powerful AI model, by pairing these chips with cheaper, less sophisticated ones.

The same day DeepSeek's AI assistant became the most-downloaded free app on Apple's App Store in the US, it was hit with "large-scale malicious attacks", the company said, causing the company to temporary limit registrations.

DeepSeek was founded in December 2023 by Liang Wenfeng, and released its first AI large language model the following year.

Not much is known about Liang, who graduated from Zhejiang University with degrees in electronic information engineering and computer science. But he now finds himself in the international spotlight.

He was recently seen at a meeting hosted by China's premier Li Qiang, reflecting DeepSeek's growing prominence in the AI industry.

Unlike many American AI entrepreneurs who are from Silicon Valley, Mr Liang also has a background in finance.

He is the CEO of a hedge fund called High-Flyer, which uses AI to analyse financial data to make investment decisons - what is called quantitative trading. In 2019 High-Flyer became the first quant hedge fund in China to raise over 100 billion yuan ($13m).

In a speech he gave that year, Liang said, "If the US can develop its quantitative trading sector, why not China?"

In a rare interview last year, he said China's AI sector "cannot remain a follower forever".

He went on: "Often, we say there's a one or two-year gap between Chinese and American AI, but the real gap is between originality and imitation. If this doesn't change, China will always be a follower."

Asked why DeepSeek's model surprised so many in Silicon Valley, he said: "Their surprise stems from seeing a Chinese company join their game as an innovator, not just a follower - which is what most Chinese firms are accustomed to."

Australia's science minister has raised some doubts over the security of the app.

"There are a lot of questions that will need to be answered in time on quality, consumer preferences, data and privacy management," Ed Husic told ABC.

"I would be very careful about that. These type of issues need to be weighed up carefully."

How are US companies like Nvidia hit?

DeepSeek's achievements undercut the belief that bigger budgets and top-tier chips are the only ways of advancing AI, a prospect which has created uncertainty about the future of high-performance chips.

"DeepSeek has proven that cutting-edge AI models can be developed with limited compute resources," says Wei Sun, principal AI analyst at Counterpoint Research

"In contrast, OpenAI, valued at $157 billion, faces scrutiny over its ability to maintain a dominant edge in innovation or justify its massive valuation and expenditures without delivering significant returns."

The company's possibly lower costs roiled financial markets on 27 January, leading the tech-heavy Nasdaq to fall more than 3% in a broad sell-off that included chip makers and data centres around the world.

Nvidia appears to have been hit the worst as its stock price plunged 17% on Monday before slowly beginning to recover on Tuesday, roughly 4% by midday.

The chip maker had been the most valuable company in the world, when measured by market capitalisation, but fell to third place after Apple and Microsoft on Monday, when its market value shrank to $2.9tn from $3.5tn, Forbes reported.

DeepSeek is a privately owned company, which means investors cannot buy shares of stock on any of the major exchanges.

China is celebrating DeepSeek's impact

DeepSeek's rise is a huge boost for the Chinese government, which has been seeking to build tech independent of the West.

While the Communist Party is yet to comment, Chinese state media was eager to note that Silicon Valley and Wall Street giants were "losing sleep" over DeepSeek, which was "overturning" the US stock market.

"In China, DeepSeek's advances are being celebrated as a testament to the country's growing technological prowess and self-reliance," says Marina Zhang, an associate professor at the University of Technology Sydney

"The company's success is seen as a validation of China's Innovation 2.0, a new era of homegrown technological leadership driven by a younger generation of entrepreneurs."

But she also warned that this sentiment may also lead to "tech isolationism".

https://www.bbc.co.uk/news/articles/c5yv5976z9po

[Anthea]

DeepSeek scores home run for China

It is yet to be seen how far the US and its Western allies go against Chinese innovation in the AI sector and how much damage the new Chinese technology could inflict on the US and European tech companies

The tech war between China and the US, which began at the dawn of the new year, has given a run to Nvidia Corporation, a US-based advanced semiconductor manufacturer specializing in artificial intelligence (AI), and it seems that China won the first round by rolling out a cutting-edge AI technology, DeepSeek-V3 models.

DeepSeek's AI assistant is now accessible for download in the US, positioning itself as a competitor to the US OpenAI's ChatGPT and Google’s Gemini, both built LLM--an advanced AI system designed to understand and generate human-like text, trained on vast amounts of text data, and that performed various language-related tasks, such as translation, summarization, and conversation.

An AI-advanced technology—as DeepSeek is—acquires knowledge and addresses challenges, generally through extensive training on substantial datasets and the identification of patterns. The outcome is software capable of engaging in conversations akin to those of a human being or forecasting individuals' purchasing behaviors. In recent years, it has gained prominence as the underlying technology for chatbots such as ChatGPT and DeepSeek, commonly referred to as generative artificial intelligence.

At the beginning of February, DeepSeek's application ascended to the pinnacle of Apple's App Store, displacing OpenAI's ChatGPT from its leading position and maintaining its lead in the AI application stores till now

Liang Wenfeng, the founder of DeepSeek, in an interview, told China Talk last year that as the economy develops, China should gradually become a contributor instead of freeriding. “Over the past three decades of the information technology revolution, China has largely refrained from engaging in genuine technological innovation. It’s just because we were not previously involved in this process and have disregarded its existence,” he replied when asked about the belief that the US excels at technological innovation while China excels at making applications.
Technology and stock markets shock

The stunning entry of two large language models (LLMs), DeepSeek RI, in late January by a small and unknown Chinese AI technology firm, DeepSeek, has caused significant damage to tech companies, the stock market, and the value of digital currencies

DeepSeek has caused a significant decline in the market capitalization of AI companies, with the total value falling by more than $2.5 billion in just 24 hours of its release. This fall coincides with the rise of DeepSeek and has had an impact on several sectors of the artificial intelligence business, including AI agents such as AIXBT, the Ai16z framework, the Virtuals AI agent-building platform, and Griffain—a cryptocurrency token that powers a blockchain-based platform.

The cryptocurrency market has also been affected, with artificial intelligence-themed meme currencies such as Fartcoin, as well as tokens like Near Protocol, Internet Computer, Render, and Artificial Superintelligence Alliance, experiencing significant drops. The stock market has been extremely volatile, resulting in a drop of more than $1 trillion in market capitalization for US equities.

Semiconductor makers, which are critical to the infrastructure of artificial intelligence, have suffered substantial setbacks, with Nvidia's stock falling by 16.9%, resulting in a $589 billion loss in market capitalization

Other large semiconductor makers have also experienced significant drops, with Broadcom and Taiwan Semiconductor Manufacturing Company's stock prices falling 17%. The international response highlights the current ambiguity and unease surrounding DeepSeek's rise, as investors voice concerns about the possible consequences for established firms, as well as the future trajectory of artificial intelligence investments.

How does DeepSeek differ from its peers?

DeepSeek asserts that the production costs of its models are lower than those of the majority of models developed in Silicon Valley. According to estimates from DeepSeek, the manufacturing cost is approximately $5.58 million, whereas the reported expenditure for the development of ChatGPT-4 exceeds $100 million.

“DeepSeek, a less-known Chinese AI company, attracted a significant market reaction because of its affordability by offering its services at only 14 cents per million input tokens—far less than OpenAI's GPT-4 that costs $15 per million input tokens,” Ali Sabir, an AI researcher at Lahore University of Management Sciences (LUMS), told Al Mayadeen English.

This scenario has caused investors to review the financial strategies of well-known artificial intelligence businesses, generating questions about their capacity to remain competitive in a market that values efficiency greatly

“DeepSeek thrives because it seamlessly integrates innovative training methods and open-source technology into its operations. More people may use it and help it grow easily,” he maintained, adding that through cooperation and knowledge-sharing, the new AI system can reshape the artificial intelligence ecosystem. DeepSeek, he revealed, challenges the notion that achieving dominance in artificial intelligence necessitates substantial infrastructure investment. Its key tokens are "Aha moments" and pure reinforcement learning.

Reactionary measure

Speaking to reporters on January 28, White House Press Secretary Karoline Leavitt mentioned that the National Security Council (NSC) would take a closer look at the potential national security implications surrounding DeepSeek's launch, emphasizing that the administration aims to "ensure American AI dominance."

Since its inception, the United States, Australia, Taiwan, India, Italy, and numerous other nations have prohibited the utilization of DeepSeek on official devices. The United States media asserts that DeepSeek not only undermines user privacy and data security but is also furnished with an integrated real-time content review system designed to disseminate China's official narrative. They contend that this renders it a possible instrument for regulating speech and manipulating public opinion, thereby eliciting considerable vigilance from the international community.

On February 4, the Australian government formally mandated a prohibition on the use of DeepSeek on government apparatus, citing that it presented an "unacceptable security risk." Historically, the Pentagon, NASA, Taiwan's Executive Yuan, and Italy's Garante have enacted comparable prohibitions

On January 29, US Senator Josh Hawley introduced a legislative proposal aimed at prohibiting American individuals from aiding China in the advancement of artificial intelligence, as well as from downloading or utilizing DeepSeek. The proposed legislation stipulates that offenders would be classified as criminals and could be subjected to a maximum imprisonment of 20 years, in addition to a monetary penalty of $1 million.

In response, the "Jun Zhengping Studio," associated with the Chinese Military Network, disseminated an article on Monday that criticized the United States for employing the "national security" pretext. The article contended that Washington has exhibited an excessive reaction to matters merely associated with the term "China", asserting that it has reached a state of "going astray".

The Voice of America (VOA), a US official outlet that is currently experiencing budgetary cuts under the Trump administration, asserts that the risks associated with DeepSeek extend beyond mere data security concerns. Numerous assessments have indicated that this system's responses markedly align with the "political doctrine" of the Chinese government. In a report published last Monday, the American media organization Wired highlighted that DeepSeek exhibited varying degrees of content censorship during its testing phase.

It is yet to be seen how far the US and its Western allies go against Chinese innovation in the AI sector and how much damage the new Chinese technology could inflict on the US and European tech companies.

https://english.almayadeen.net/articles ... irst-innin