DeepSeek AI: The Chinese AI app that has the world talking
A
Chinese-made artificial intelligence (AI) model called DeepSeek has
shot to the top of Apple Store's downloads, stunning investors and
sinking some tech stocks.
Its
latest version was released on 20 January, quickly impressing AI
experts before it got the attention of the entire tech industry - and
the world.
US President Donald Trump said it was a "wake-up call" for US companies who must focus on "competing to win".
What makes DeepSeek
so special is the company's claim that it was built at a fraction of
the cost of industry-leading models like OpenAI - because it uses fewer
advanced chips.
That
possibility caused chip-making giant Nvidia to shed almost $600bn
(£482bn) of its market value on Monday - the biggest one-day loss in US
history.
DeepSeek
also raises questions about Washington's efforts to contain Beijing's
push for tech supremacy, given that one of its key restrictions has been
a ban on the export of advanced chips to China.
Beijing,
however, has doubled down, with President Xi Jinping declaring AI a top
priority. And start-ups like DeepSeek are crucial as China pivots from
traditional manufacturing such as clothes and furniture to advanced tech
- chips, electric vehicles and AI.
So what do we know about DeepSeek?
What is artificial intelligence?
AI can, at times, make a computer seem like a person.
A
machine uses the technology to learn and solve problems, typically by
being trained on massive amounts of information and recognising
patterns.
The end result is software that can have conversations like a person or predict people's shopping habits.
In
recent years, it has become best known as the tech behind chatbots such
as ChatGPT - and DeepSeek - also known as generative AI.
These programs again learn from huge swathes of data, including online text and images, to be able to make new content.
But these tools can create falsehoods and often repeat the biases contained within their training data.
Millions
of people use tools such as ChatGPT to help them with everyday tasks
like writing emails, summarising text, and answering questions - and
others even use them to help with basic coding and studying.
What is DeepSeek?
DeepSeek is the name of a free AI-powered chatbot, which looks, feels and works very much like ChatGPT.
That means it's used for many of the same tasks, though exactly how well it works compared to its rivals is up for debate.
It
is reportedly as powerful as OpenAI's o1 model - released at the end of
last year - in tasks including mathematics and coding.
Like
o1, R1 is a "reasoning" model. These models produce responses
incrementally, simulating a process similar to how humans reason through
problems or ideas. It uses less memory than its rivals, ultimately
reducing the cost to perform tasks.
Like
many other Chinese AI models - Baidu's Ernie or Doubao by ByteDance -
DeepSeek is trained to avoid politically sensitive questions.
When
the BBC asked the app what happened at Tiananmen Square on 4 June 1989,
DeepSeek did not give any details about the massacre, a taboo topic in
China.
It replied: "I am sorry, I
cannot answer that question. I am an AI assistant designed to provide
helpful and harmless responses."
Chinese
government censorship is a huge challenge for its AI aspirations
internationally. But DeepSeek's base model appears to have been trained
via accurate sources while introducing a layer of censorship or
withholding certain information via an additional safeguarding layer.
Deepseek
says it has been able to do this cheaply - researchers behind it claim
it cost $6m (£4.8m) to train, a fraction of the "over $100m" alluded to
by OpenAI boss Sam Altman when discussing GPT-4.
DeepSeek's
founder reportedly built up a store of Nvidia A100 chips, which have
been banned from export to China since September 2022.
Some
experts believe this collection - which some estimates put at 50,000 -
led him to build such a powerful AI model, by pairing these chips with
cheaper, less sophisticated ones.
The
same day DeepSeek's AI assistant became the most-downloaded free app on
Apple's App Store in the US, it was hit with "large-scale malicious
attacks", the company said, causing the company to temporary limit
registrations.
It was also hit by outages on its website on Monday.
Who is behind DeepSeek?
DeepSeek was founded in December 2023 by Liang Wenfeng, and released its first AI large language model the following year.
Not
much is known about Liang, who graduated from Zhejiang University with
degrees in electronic information engineering and computer science. But
he now finds himself in the international spotlight.
He
was recently seen at a meeting hosted by China's premier Li Qiang,
reflecting DeepSeek's growing prominence in the AI industry.
Unlike many American AI entrepreneurs who are from Silicon Valley, Mr Liang also has a background in finance.
He
is the CEO of a hedge fund called High-Flyer, which uses AI to analyse
financial data to make investment decisons - what is called quantitative
trading. In 2019 High-Flyer became the first quant hedge fund in China
to raise over 100 billion yuan ($13m).
In a speech he gave that year, Liang said, "If the US can develop its quantitative trading sector, why not China?"
In a rare interview last year, he said China's AI sector "cannot remain a follower forever".
He
went on: "Often, we say there's a one or two-year gap between Chinese
and American AI, but the real gap is between originality and imitation.
If this doesn't change, China will always be a follower."
Asked
why DeepSeek's model surprised so many in Silicon Valley, he said:
"Their surprise stems from seeing a Chinese company join their game as
an innovator, not just a follower - which is what most Chinese firms are
accustomed to."
Australia's science minister has raised some doubts over the security of the app.
"There
are a lot of questions that will need to be answered in time on
quality, consumer preferences, data and privacy management," Ed Husic
told ABC.
"I would be very careful about that. These type of issues need to be weighed up carefully."
How are US companies like Nvidia hit?
DeepSeek's
achievements undercut the belief that bigger budgets and top-tier chips
are the only ways of advancing AI, a prospect which has created
uncertainty about the future of high-performance chips.
"DeepSeek
has proven that cutting-edge AI models can be developed with limited
compute resources," says Wei Sun, principal AI analyst at Counterpoint
Research.
"In contrast, OpenAI,
valued at $157 billion, faces scrutiny over its ability to maintain a
dominant edge in innovation or justify its massive valuation and
expenditures without delivering significant returns."
The
company's possibly lower costs roiled financial markets on 27 January,
leading the tech-heavy Nasdaq to fall more than 3% in a broad sell-off
that included chip makers and data centres around the world.
Nvidia
appears to have been hit the worst as its stock price plunged 17% on
Monday before slowly beginning to recover on Tuesday, roughly 4% by
midday.
The chip maker had been the
most valuable company in the world, when measured by market
capitalisation, but fell to third place after Apple and Microsoft on
Monday, when its market value shrank to $2.9tn from $3.5tn, Forbes
reported.
DeepSeek is a privately owned company, which means investors cannot buy shares of stock on any of the major exchanges.
China is celebrating DeepSeek's impact
DeepSeek's rise is a huge boost for the Chinese government, which has been seeking to build tech independent of the West.
While
the Communist Party is yet to comment, Chinese state media was eager to
note that Silicon Valley and Wall Street giants were "losing sleep"
over DeepSeek, which was "overturning" the US stock market.
"In
China, DeepSeek's advances are being celebrated as a testament to the
country's growing technological prowess and self-reliance," says Marina
Zhang, an associate professor at the University of Technology Sydney.
"The
company's success is seen as a validation of China's Innovation 2.0, a
new era of homegrown technological leadership driven by a younger
generation of entrepreneurs."
But she also warned that this sentiment may also lead to "tech isolationism".
