DeepSeek R1: Has Chinese AI Shook the US Tech World?

China has surprised the world and especially US tech industry by launching an efficient and powerful AI model last week in Jan 20, 2025. It’s called DeepSeek R1 and developed by a start-up based in the eastern Chinese city of Hangzhou and reportedly has shown the ability to match the capacity of AI pace-setters.

DeepSeek R1 company is only one-year-old startup founded in late 2023 by Chinese hedge fund manager Liang Wenfeng.

DeepSeek’s AI is free on both the web and on a mobile app. It is quite identical to ChatGPT’s so users can interact with the bot by typing text or uploading files and images. It has option to enable reasoning system to cater complex decision-making and logic-based tasks.

US President Donald Trump warns Chinese startup DeepSeek as a “wake-up call” for US tech firms in the race to lead artificial intelligence.

AI is a cost-intensive technology but the company said it had spent only $5.6 million powering its base AI model, compared with the hundreds of millions, if not billions of dollars US companies spend on their AI technologies. Interestingly it is an open-source so other companies can work on it to improve it.

Stock markets like Wall Street downturn was triggered by the release of DeepSeek’s latest AI model on Monday 27th January 2025 as the tech-heavy Nasdaq plunged by 3.1%, S&P 500 fell 1.5% and Nvidia, the leading supplier of AI chips, fell 12% in premarket trading.

OpenAI CEO Sam Altman praised the recent debut of new rival DeepSeek’s latest AI model, saying that it was “invigorating to have a new competitor.”

The DeepSeek app has surged on the app store charts, surpassing ChatGPT on Monday as it has been downloaded 2 million times and on the other hand Chinese AI sensation DeepSeek on same day said it was limiting the registration of new users due to large-scale cyberattacks on its services.

ABOUT THE AUTHOR

Humayun Atif | CMA, CPA, CA (FIN), MS-IT, CA Articles from Big 4, Certified Forensic Accountant (USA), Six Sigma & Oracle Certified.

Atif is passionate about Business, Tech, and the written word. He is the author of the book ‘IFRS Made Easy’. He is a Tax and IFRS coach and the founder of accountingblogger.com