10 things to know about Chinese AI Company DeepSeek gaining global attention

DeepSeek, a Chinese AI startup, has quickly gained global attention by offering a low-cost alternative to dominant US tech players like Nvidia and OpenAI.
On January 27, the US stock market experienced a historic decline, with Nvidia’s shares dropping nearly 17%, wiping out $600 billion in market value.
The catalyst for this massive shift? DeepSeek’s rapid rise, which has sparked concerns over the future of AI and computing infrastructure.
Here are 10 things you need to know about DeepSeek and its disruptive potential in the AI landscape.
Its Emergence
DeepSeek is a Chinese AI startup that has quickly garnered attention with its innovative, cost-effective AI models. Their DeepSeek-V3 model uses less computing power and data compared to rivals, allowing the company to provide a powerful AI assistant at a fraction of the cost of other models like ChatGPT.
A New Challenger to the AI Market
DeepSeek launched a free AI assistant last week, which, according to reports, surpassed ChatGPT in downloads on the US App Store by January 27. This rapid growth has raised alarms about the potential for a price war in AI and the impact on demand for high-cost tech infrastructure.
Who’s Behind DeepSeek?
DeepSeek was created by Liang Wenfeng, the co-founder of China’s quantitative hedge fund High-Flyer.
fund, which focuses on AI research, is the controlling shareholder of DeepSeek. Liang’s vision for the startup is to explore the development of Artificial General Intelligence (AGI), with DeepSeek being a key part of this mission.
How Much is DeepSeek Costing?
A breakthrough paper revealed that DeepSeek-V3’s training required less than $6 million in Nvidia H800 chips—far less than the investments needed by its American competitors. This low cost is one of the key factors fueling the company’s rapid rise.
Market Reaction and Investor Concerns
The success of DeepSeek’s AI assistant has sent shockwaves through the tech sector, particularly impacting Nvidia. Investors are worried that DeepSeek’s ability to operate with lower-cost models could erode the competitive edge held by US firms, and this has led to a significant sell-off in tech stocks.
Impact on AI’s Computing Power Demand
With DeepSeek offering a lower-cost alternative to existing AI models, analysts are questioning the sustainability of AI’s current demand for high-end computing power, particularly GPUs. Some experts, like those from Jefferies, are concerned that the substantial investments in GPUs have yet to produce clear, tangible returns.
Implications for Smartphones
If DeepSeek’s smaller, more efficient models continue to succeed, they could have a positive impact on AI integration in smartphones. A lower demand for high-end hardware would make it easier to incorporate AI features into everyday devices without costly upgrades.
The Bright Future of Chinese AI
UBS has noted a potentially bright outlook for the Chinese AI market, citing DeepSeek’s innovative approach to training models as a game-changer. If DeepSeek’s methods prove scalable, they could accelerate AI adoption and bring AGI closer to reality, with lower costs encouraging broader implementation.
Cyberattack on DeepSeek’s Website
DeepSeek’s rapid rise to prominence was not without complications. On January 27, the company experienced a cyberattack that temporarily disrupted its website and limited new user registrations. The website outages coincided with the assistant’s sudden surge in popularity.
US Reactions to DeepSeek
Both former US President Donald Trump and OpenAI CEO Sam Altman have weighed in on DeepSeek’s success. Trump sees the rise of DeepSeek as a wake-up call for American industries to remain competitive, while Altman praised DeepSeek’s impressive model but emphasized that OpenAI would continue to lead the field with superior models.