China has launched a new cutting-edge AI model called DeepSeek. Released on Monday, January 20, this new model has shaken up the global AI industry by offering a cheaper alternative to leading AI models.
The company behind this chatbot claims that it offers superior performance in various benchmarks compared to other open-source models. Additionally, the company highlights DeepSeek’s ability to compete with the leading closed-sourced models such as GPT-4 and Claude while costing a fraction of the price. For example, OpenAI is said to spend billions of dollars on developing GPT, while DeepSeek’s training cost is reported to be only $6 million.
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Launching a cheaper and free AI model has had a massive impact on the AI market. Several Silicon Valley companies have taken a significant hit. NVIDIA, a renowned AI chip manufacturer, lost 17% of its market evaluation on Monday, which equals $593 billion. Microsoft and Google also saw losses of 2.1% and 4.2% respectively, according to reports.
Experts have viewed China as America’s closest rival in the global AI race. On Monday, newly elected US President Donald Trump claimed that the release of DeepSeek was a much-needed “wake-up” call for the US. He also praised China’s more cost-effective approach to AI, stating, “I’ve been reading about China and some of the companies in China, one in particular coming up with a faster method of AI and a much less expensive method, and that’s good because you don’t have to spend as much money. I view that as a positive, as an asset,”.
DeepSeek is a Chinese AI company founded by Liang Wenfeng. The new DeepSeek-R1 model is currently available on the web, iOS, and API.
