In a remarkable turn of events, DeepSeek, a Chinese startup, has seen its AI assistant app ascend to the top of Apple's US App Store, becoming the most downloaded application over the weekend. This surge in popularity has sent shockwaves through Silicon Valley, leading to a significant decline in the stock prices of major tech companies. Notably, Nvidia experienced a staggering loss of over $460 billion in market capitalization on Monday, marking what Bloomberg described as the "largest drop in US stock market history."
The upheaval is largely attributed to DeepSeek's open-source AI model, known as R1, which was introduced earlier this month. DeepSeek claims that R1 competes directly with the industry leader, OpenAI's GPT-4. What has particularly astonished the tech community is the assertion that DeepSeek developed its model using only a fraction of the specialized computer chips typically required for advanced AI systems.
In response to the overwhelming demand, DeepSeek announced on its website that it would temporarily restrict new user registrations due to "large-scale malicious attacks" targeting its services.
Jack Clark, co-founder of AI startup Anthropic, noted in his newsletter that DeepSeek's R1 model "challenges the assumption that Western AI companies maintain a dominant position over their Chinese counterparts." Venture capitalist Marc Andreessen referred to this moment as "AI's Sputnik moment," highlighting its potential impact on the industry.
Cheng Lu, a research scientist at OpenAI, praised DeepSeek's chatbot for its impressive command of the Chinese language, stating, "It's the first time I can feel the beauty of the Chinese language created by a chatbot," in a post on X (formerly Twitter) on Sunday.
DeepSeek's AI assistant is currently available for free and offers three primary functionalities. Users can pose questions to the chatbot and receive direct responses. For instance, when WIRED requested recipe suggestions that included pomegranate seeds, DeepSeek's chatbot promptly provided 15 diverse options, ranging from yogurt parfaits to a "Middle Eastern-inspired" rice pilaf, although it did not reference specific chefs or recipes.
Additionally, the app features a search mode that retrieves answers from the internet. When WIRED inquired about significant news stories, DeepSeek's chatbot mentioned the Israel-Hamas ceasefire and linked to various Western news outlets, including BBC News. However, not all the cited stories were relevant, with one being a New York Times article discussing DeepSeek's influence on the stock market.
The app also includes a "DeepThink" mode, which allows users to engage with DeepSeek's R1 model, an enhancement of the existing V3 model. R1 is designed with "reasoning" capabilities that enable it to articulate the steps taken to arrive at its conclusions. For example, when asked about the most significant historical events of the 20th century, DeepSeek provided a lengthy response that began with broad questions about the century's complexities.
However, before it could complete its answer, the response abruptly vanished, replaced by a message stating, "Sorry, I'm not sure how to approach this type of question yet. Let's chat about math, coding, and logic problems instead!" Observers have noted that, similar to other tech platforms operating in China, DeepSeek appears to censor topics that are considered sensitive by the Chinese Communist Party.
Despite these constraints, DeepSeek's free chatbot poses a formidable challenge to competitors like OpenAI, which charges $20 per month for access to its most advanced AI models. Unlike DeepSeek, OpenAI does not disclose the underlying "weights" of its models, which are critical in determining how the AI processes information. Furthermore, OpenAI has refrained from making public the complete "chains of thought" generated by its reasoning models.
As DeepSeek continues to gain traction in the AI market, the implications for the global tech landscape are significant, prompting a reevaluation of the competitive dynamics between Eastern and Western AI companies.
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