DeepSeek Beats ChatGPT in AI, Rivals Stocks Plunge
Chinese artificial intelligence (AI) app DeepSeek has overtaken ChatGPT and other rivals to become the top-rated free application on Apple’s App Store in the United States, United Kingdom, China and other bellwether economies.
In terms of capability against major rivals, DeepSeek-V3 achieves a significant breakthrough in inference speed over previous models. It tops the leaderboard among open-source models and rivals the most advanced closed-source models globally, the company said.
The take for the market is DeepSeek cost effectiveness while running on cheap chips. In 2023, DeepSeeks was spun off from High-Flyer Quant, a Chinese hedge fund that heavily used AI to manage its trades.
Its surge in popularity has sparked a selloff of shares in AI-related companies based in the US. Nvidia, Microsoft, and Meta were down on Monday morning, and the development knocked down European share prices. The Chinese AI is seen as a potential risk to sky-high U.S. tech valuation.
The app has surged in popularity since its launch, challenging the widely held belief that the US is the unassailable leader in AI and prompting questions about the scale of investments US firms are planning.
It is powered by the open-source DeepSeek-V3 model, which its researchers claim was developed for less than $6 million—significantly less than the billions spent by rivals.
Several major U.S. tech and artificial intelligence stocks tumbled in premarket trading early on Monday after the successful launch of Chinese startup DeepSeek’s latest AI model—which impressed observers by running on less powerful chips compared to U.S. rivals like OpenAI’s—triggered questions about America’s leadership in the space.
DeepSeek launched its AI language model in November 2023 as an open-source product, allowing users to download and run it locally on their own computers.
Its latest product, R1—an open-sourced so-called “reasoning model”—launched last week, and the company claims its performance matches OpenAI’s o1 model in certain benchmarks. DeepSeek-R1 is now MIT licensed for clear open access.
The efficiency has also allowed DeepSeek to massively undercut OpenAI on pricing, as its application programming interface (API)—which allows other businesses and platforms to leverage the startup’s AI model—costs just $0.55 per million input tokens and $2.19 per million output tokens, compared to $15 and $60 for OpenAI’s o1. Naira Struggles to Keep Value as FX Pressures Mount
