While Mr. President is busy investing billions in AI advancements, a made-in-China AI app has taken the world by storm! DeepSeek, a cheaper and faster AI chatbot, has thrown big giants like ChatGPT out of the battleground overnight. It has exceeded ChatGPT not only on the Apple App Store but also on the tech stock market and this has left the world in shock. Is it over for ChatGPT? Here’s the tea.
In mid-January, Donald Trump confidently announced a $500 billion investment in a new AI infrastructure initiative backed by OpenAI and SoftBank calling it the ‘largest AI infrastructure project in history’. At the same time, DeepSeek AI launched its open-source AI model DeepSeek-R1. Then, almost overnight, DeepSeek flipped the coin. The Chinese-made ChatGPT-like app soon crossed the OG among the top downloads on Apple’s App Store. Reason? Recognized by its blue whale logo, the app was developed by a Hangzhou-based startup. It offers advanced AI features and that too at reduced prices. DeepSeek-R1 answers user queries with similar personality-driven responses like OpenAI’s ChatGPT. It is just as accurate and its remarkable performance is complemented by its staggeringly low cost. This combination has grabbed all eyeballs and led to a severe disruption to the global AI sector.
While OpenAI’s most advanced ChatGPT models cost over $100 million to develop, DeepSeek was reportedly built in just two months and under $6 million! This revolutionary development has left everyone questioning the belief that advanced AI requires high-end microchips, enormous energy, and so much money. Companies are now questioning whether they need to buy as many high-performance tools as claimed by some big names.
Soon, DeepSeek experienced a rise in the market leading to Nvidia dropping its stocks by 17% in a day leading to a record loss of over $590 billion for the chipmaker. But why cause stock drops for Nvidia? As the buzz says, DeepSeek uses cheaper Nvidia chips raising concerns and suspicion among the market. Ultimately, the U.S. stock market faced a significant downturn, losing nearly $2 trillion in a single day.
The tech world is now being questioned about the need to invest so much in costly chips and data centers for AI when DeepSeek is doing it all at half the prices and at a similar speed. What is your opinion on this?
