Concerns that the AI developments of Chinese companies could jeopardize the financial stability of tech giants in the US and Europe have led to a sell-off of U.S. tech stocks, with the latest AI app, DeepSeek, from China, rising to the top of Apple’s App Store.
An effective and potent Chinese AI model that has swept the tech sector is called DeepSeek R1. It was created by DeepSeek, a startup that was only founded a year ago but has already made significant strides in the field of artificial intelligence. Renowned tech investor Marc Andreessen has dubbed this “AI’s Sputnik moment.”
At a fraction of the price, this new AI startup can almost match the capabilities of its much more well-known competitors, such as Google’s Gemini, OpenAI’s GPT-4, and Meta’s Llama.
In contrast to the hundreds of millions, if not billions, of dollars that US companies spend on their AI technologies, the company claimed to have only spent $5.6 million to power its base AI model.
Liang Wenfeng, a Chinese hedge fund manager, founded DeepSeek in late 2023. Additionally, it is one of the many startups that have emerged in recent years and are looking for significant funding in order to capitalize on the enormous AI wave that has propelled the tech sector to unprecedented heights.
These days, Liang Wenfeng is an advocate for AI technology and funding for fresh studies. His hedge fund, High-Flyer, focuses on AI development.
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Over the past year, DeepSeek has released a number of competitive AI models that have drawn some industry attention, much like other AI startups like Anthropic and Perplexity. According to the Wall Street Journal, the company’s V3 model increased some awareness of it, but its content restrictions on delicate subjects involving the Chinese government and its leadership raised questions about its ability to compete in the market.
R1 has drawn a lot of attention in a short period of time. The app has been downloaded almost two million times and has risen to the top of the app store charts, even surpassing ChatGPT in its early days.
Meanwhile, Meta disclosed has that it would invest more than $65 billion in AI development this year. Last year, OpenAI CEO Sam Altman predicted that the AI sector would require trillions of dollars in investment to support the development of high-in-demand chips needed to power the electricity-hungry data centers that run the sector’s complex models.
Several firms have endorsed DeepSeek, and have called tagged it as “one of the most amazing and impressive apps with a fast breakthrough.
