DeepSeek is a Chinese artificial intelligence company that develops Language Learning Models, or LLMs. Based in Hangzhou, it is owned by the Chinese hedge fund High-Flyer. On the 20th of January 2025, DeepSeek released its first free chatbot app, surpassing ChatGPT in terms of downloads on iOS in the United States. This resulted in NVIDIA (the company that provides AI chips) stocks to drop 18%, causing panic in the AI sector of the US
DeepSeek’s achievement in developing a highly competitive AI model, despite low budgets, created uncertainties and concerns among the future of high-performance chips. President Trump pledged to support the $500 billion Stargate Project, a project that aims to improve AI infrastructure in the US, likely as a response to the rise of DeepSeek, according to an announcement Trump made on the 22nd of January 2025.
The question that arose was how did DeepSeek manage to develop a competitive LLM with their own tech or without a grand budget, and how will it impact AI from now on? The efficiency of DeepSeek was quite unprecedented, being a significant innovation on the AI section. Key to this was DeepSeek’s ‘Mixture of Experts’, splitting its models into specialising a specific task or data type. DeepSeek lowered the barrier to AI development, leading many companies to dip their toes in the water. This is extremely uncertain, an unregulated market might drive innovation, but new risks increase substantially.
Despite the claims of DeepSeek, the cost to develop it has been unverified according to an investigation by SemiAnalysis (an independent research company), possibly being way over $5.7 million DeepSeek claims to have cost. Not just the budget, concerns over DeepSeek stealing intellectual property arose. However it is also important to note that numerous people and organisations such as George R.R Martin, The New York Times, and GEMA have accused Chat GPT or other AI models of disregarding intellectual property rights while developing their own. DeepSeek claims that they only used data that has existed prior. DeepSeek has multiple different ways it could cause and impact and this period is extremely crucial. In a bullish scenario it could pave the way for AI innovation, causing the US AI sector to innovate and compete with their Chinese counterparts. In a bearish scenario, people might be demotivated to keep developing AI, possibly creating a monopoly on the AI market.
