Almost everyone is talking about DeepSeek out of nowhere. It’s getting so much hype from politicians to big investors in the IT industry. They can’t get enough of discussing it. But why is everyone taking so much interest in DeepSeek?
In the era of artificial intelligence (AI), it’s believed that creating AI assistance needs a certain amount of budget to invest. But this new open sourced artificial intelligence (AI) named DeepSeek proved this belief wrong.
What is DeepSeek?
DeepSeek is a Chinese artificial intelligence (AI) assistance development firm. It’s based in Hangzhou, China. The startup is owned by Liang Wenfeng and was established in May 2023. Since its establishment, it has focused on creating open source large language models. The startup launched the first model of DeepSeek in November 2023 and it kept working on developing different variations.
In January 2025, it launched its R1 model, which then took a turn to skyrocket its popularity. On January 27, 2025, DeepSeek ranked as the most downloaded app on Apple’s app store. Many investors and big tech companies witnessed a significant drop in the stock market because of it. DeepSeek shook the whole artificial intelligence (AI) industry, including Nvidia.
Why is DeepSeek getting so much hype?
The main reason for DeepSeek to get so much hype is the lower development cost that puts other big artificial intelligence (AI) of the US companies to question their approach. The DeepSeek startup revealed that they only invested less than $6 million to develop it. Whereas, OpenAI needed hundreds of millions of dollars for only the o1 model. Not only that, but DeepSeek follows an open-source policy and model, which makes it more transparent and flexible.
Why does the US feel threatened by DeepSeek?
DeepSeek caused major losses to many big US tech companies linked to artificial intelligence (AI) advancement. According to Bloomberg, around $94 billion loss has occurred among billionaires, a total 85% decline. This is alarming for the US and poses a threat to the dominance of the US in the tech sector.
Cost disturbance
The big US companies have been investing billions in development costs for artificial intelligence (AI) models. However, the Chinese firm DeepSeek only invested less than $6 million in creating the R1 model. This shows that people can achieve artificial intelligence (AI) at a lower cost.
Technical advancement
China is restricted from using GPU chips and all the advanced technical artificial intelligence (AI) accelerators from the US. Despite the limited resources and restrictions, China is able to create a leading open-source artificial intelligence (AI). It's a big achievement and raises questions about the big US artificial intelligence (AI) companies.
Business model
DeepSeek provides an open-source artificial intelligence (AI) platform for free. It challenges the entire business and revenue model of the US artificial intelligence (AI) market, which charges a fee every month from users.
Global dominance
The eastern Chinese AI development DeepSeek threatens the global market, which has been dominated by the US so far. It carries a movement that has become a history in the artificial intelligence (AI) development industry.
Final thoughts
As the demand for AI is increasing, DeepSeek brings more flexibility and hope for lower development costs. It roughly challenges the US tech market, whether it's OpenAI, which is made of more than a hundred million dollars, or Nvidia’s chip dominance. DeepSeek seems to be the better option in artificial intelligence (AI) assistance currently.
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