Chinese startup DeepSeek’s artificial intelligence (AI) Assistant on Monday overtook rival ChatGPT to become the top-rated free application available on Apple’s App Store in the United States.
Powered by the DeepSeek-V3 model, which its creators say “tops the leaderboard among open-source models and rivals the most advanced closed-source models globally”, the artificial intelligence application has surged in popularity among US users since it was released on January 10, according to app data research firm Sensor Tower.
The milestone highlights how DeepSeek has left a deep impression on Silicon Valley, upending widely held views about US primacy in AI and the effectiveness of Washington’s export controls targeting China’s advanced chip and AI capabilities.
AI models from ChatGPT to DeepSeek require advanced chips to power their training. The Biden administration has since 2021 widened the scope of bans designed to stop these chips from being exported to China and used to train Chinese firms’ AI models.
However, DeepSeek researchers wrote in a paper last month that the DeepSeek-V3 used Nvidia’s H800 chips for training, spending less than $6 million.
Although this detail has since been disputed, the claim that the chips used were less powerful than the most advanced Nvidia products Washington has sought to keep out of China, as well as the relatively cheap training costs, has prompted US tech executives to question the effectiveness of tech export controls.
Little is known about the company behind DeepSeek, a small Hangzhou-based startup founded in 2023, when search engine giant Baidu released the first Chinese AI large-language model.
Since then, dozens of Chinese tech companies large and small have released their own AI models, but DeepSeek is the first to be praised by the US tech industry as matching or even surpassing the performance of cutting-edge US models.
Eyes on DeepSeek
All three main indexes on Wall Street fell on Friday, with the S&P 500 off a record high on profit-taking and as tech firms took a hit following the launch of the DeepSeek AI programme last week.
The firm said only $5.6m was spent developing the model.
The programme’s arrival has sparked competition fears, as tech titans — including Nvidia, Meta and Alphabet — have made huge investments worth hundreds of billions of dollars into AI products and sent their valuations soaring.
It also came on the heels of Trump’s announcement of a new $500bn venture to build infrastructure for artificial intelligence in the United States.
Tech and chip firms were among the big losers in Tokyo as the Nikkei ended in negative territory, with Advantest down more than eight per cent and Tokyo Electron off almost five pc.
SoftBank, which is a key investor in Trump’s AI project, tumbled more than eight pc.
“What we’ve found is that DeepSeek… is the top performing, or roughly on par with the best American models,” Alexandr Wang, CEO of Scale AI, told CNBC.
There were also losses in Shanghai, Singapore, Wellington, Mumbai, Bangkok and Manila but Hong Kong rose.
London and Frankfurt opened on the back foot, having retreated Friday from record highs, while Paris also fell.
