Is ChatGPT era drawing to a close? Chinese AI startup DeepSeek takes throne on App Store

Chinese artificial intelligence company DeepSeek has made waves in the tech world with its AI Assistant app. The chatbot recently surpassed ChatGPT to become the most downloaded free app on Apple’s App Store. Released in the US on January 10, the app has not only changed the face of the AI landscape, but also shaken global financial markets.  

DeepSeek was founded in Hangzhou, China, in 2023 by Liang Wenfeng, a hedge fund manager. Liang reportedly accumulated a significant number of Nvidia A100 chips before restrictions on their export to China were enforced. He had a rather innovative approach, wherein he combined these with cheaper chips. This allowed DeepSeek to develop powerful models at a fraction of the usual cost.

Overall, their AI models have been hailed for their efficiency and competitive performance with their counterparts. Developed at a cost of just 6 million USD, significantly lower than the billions spent by US rivals, the company’s advancements are being recognized as a major breakthrough in the field of artificial intelligence. The company claims that DeepSeek's R1 model performs at par with leading models like OpenAI's GPT and excels in logical reasoning tasks.  

DeepSeek’s app has gained popularity for its intuitive AI assistant, which competes directly with ChatGPT by offering users answers to questions and enhancing daily life tasks. The chatbot’s homepage first requires any user to register. However, despite its success, DeepSeek is grappling with certain challenges, including large-scale cyberattacks that have limited user registrations. The homepage gives a disclaimer stating: “Due to large-scale malicious attacks on DeepSeek’s services, registration may be busy. Please wait and try again.”

Additionally, scepticism lingers around the claims made by the company. OpenAI CEO Sam Altman questioned the originality of its advancements. In a post on X, Altman wrote, “It is (relatively) easy to copy something that you know works. It is extremely hard to do something new, risky, and difficult when you don't know if it will work.”

Besides the criticism, DeepSeek’s rise has had a profound impact on global markets. On January 27, Nvidia suffered a massive 17% drop in its share value, with the company’s market value dropping by $600 billion, making it the largest one-day loss in U.S. history. Nvidia, which had been the most valuable company in the world, fell to the third place, behind Apple and Microsoft, in terms of market capitalisation, on Monday when its market value shrank to 2.9 trillion USD from 3.5 trillion USD, Forbes reported.

This underscores the uncertainty surrounding the demand for high-performance chips. Meanwhile, the US is doubling down on AI innovation with initiatives like the 500 billion USD Stargate Initiative, expected to be the largest AI infrastructure project in history. DeepSeek’s emergence signals a significant shift in the AI industry, demonstrating that advancements can be achieved even on smaller budgets even in this rapidly evolving field.