How Did DeepSeek Shake Up AI Overnight?

In a surprising development, the release of DeepSeek, a Chinese-developed artificial intelligence (AI) model, has sent ripples through the tech industry, drawing attention from experts and altering global market dynamics. DeepSeek’s debut marks a major milestone in the evolution of AI – a disruption in a space long dominated by Western companies.

DeepSeek Launch January 20 — Image courtesy of Mojahid Mottakin

DeepSeek’s Impact On Tech Markets

On 20 January, DeepSeek introduced its flagship AI-powered chatbot, R1, a model that harmonises performance and cost-efficiency in ways previously thought unattainable. Comparable to OpenAI’s acclaimed o1 model, R1 delivers exceptional results in tasks such as mathematics, coding, and logical reasoning, all while offering significantly reduced training costs. The secret behind this breakthrough lies in resourceful engineering.

Within days, the app soared to the top of Apple Store downloads, surpassing established names like ChatGPT and securing its place as a global phenomenon. As a result, DeepSeek’s rapid ascent rippled across the financial world, triggering major shifts in the valuation of leading tech stocks. Nvidia, a dominant force in the chip-making industry, faced an extraordinary one-day market cap loss of $600 billion, highlighting the transformative impact of this new competitor.

DeepSeek Liang Wenfeng symposium in Beijing Chinese Premier Li Qiang — Image courtesy of Xinhua

The New Era: China’s Pivot To Tech Leadership

Created at a reported cost of just USD$6 million – an impressive figure compared to the hefty budgets of its Western counterparts – DeepSeek’s R1 demonstrates that cutting-edge AI doesn’t need to depend solely on expensive, high-performance chips. Instead, the model utilises a combination of Nvidia’s lower-capacity A100 chips and other cost-efficient components, proving that excellence can be achieved through ingenuity.

Leading DeepSeek is Liang Wenfeng, a Zhejiang University alumnus with a distinctive mix of knowledge in technology and finance. As the founder of High-Flyer, China’s first quantitative hedge fund to raise over RMB$100 billion, Liang’s deep understanding of AI applications has brought him to international prominence. His philosophy – prioritising originality over imitation – positions DeepSeek as a pioneer in a field often defined by gradual progress.

In his own words, ‘Their surprise stems from seeing a Chinese company join their game as a leader, not just a follower.’ Liang’s strategy for DeepSeek embodies a broader ambition for China’s tech sector: to reshape its role on the global stage, shifting from manufacturing-based growth to technological dominance.

DeepSeek widely accessible free access — Image courtesy of Andy Wong via AP

The Road Ahead

DeepSeek’s rise also raises compelling questions about the geopolitics of technology. As Washington imposes export restrictions on advanced chips, Beijing strengthens its commitment to AI development. With President Xi Jinping declaring AI a top priority, DeepSeek exemplifies China’s determination to compete – and push boundaries – on the world stage. Furthermore, the model’s open-source nature allows smaller labs and researchers worldwide to utilise its capabilities, expanding access to advanced AI tools.

As investors reassess their positions in tech stocks, DeepSeek’s story serves as both a wake-up call and an inspiration – reminding the world that breakthroughs often emerge from unexpected places. In a world fascinated by AI’s potential, DeepSeek stands as a symbol of possibility, challenging conventional wisdom and reshaping the boundaries of technological progress. As the tech industry adapts to this pivotal moment, DeepSeek’s impact promises to light the way forward.

Catherine Pun

Editorial Director | + posts

A Hong Kong native with Filipino-Chinese roots, Catherine infuses every part of her life with zest, whether she’s belting out karaoke tunes or exploring off-the-beaten-path destinations. Her downtime often includes unwinding with Netflix and indulging in a 10-step skincare routine. As the Editorial Director of Friday Club., Catherine brings her wealth of experience from major publishing houses, where she refined her craft and even authored a book. Her sharp editorial insight makes her a dynamic force, always on the lookout for the next compelling narrative.