Chinese AI application DeepSeek has surpassed ChatGPT and other competitors to become the highest-rated free app on Apple’s App Store in the United States, the United Kingdom, and China.
Since its launch in January, the app has gained immense popularity, challenging the common perception that the U.S. is the uncontested frontrunner in the AI sector. It operates on the open-source DeepSeek-V3 model, which its creators assert was developed for under $6 million — a fraction of the billions invested by its competitors.
Following the release of DeepSeek-R1 earlier this month, the company claimed it offers “performance comparable to” one of OpenAI’s latest models when handling tasks like mathematics, coding, and natural language reasoning.
Advanced chips, including ChatGPT and DeepSeek, are essential for training AI models. Since 2021, the U.S. government has increased its restrictions on selling advanced chips to China.
To continue their work without reliable supplies of imported high-end chips, Chinese AI developers have collaborated and explored new technological approaches.
This collaboration has led to AI models that necessitate significantly less computing power than prior iterations, resulting in much lower costs than previously anticipated, which could potentially disrupt the industry.
On Monday, shares of US-based AI companies, such as Nvidia, Microsoft, and Meta, saw declines.
Founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China, the company has quickly made an impact. The 40-year-old also established the hedge fund that financially supported DeepSeek.
He reportedly amassed a stockpile of Nvidia chips, now restricted from exporting to China. Experts estimate that this collection, comprising around 50,000 chips, was instrumental in launching DeepSeek by combining these chips with more affordable, lower-tier, exportable models.
