What is DeepSeek and why did US tech stocks fall?
What is DeepSeek and why did US tech stocks fall?
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Why doubts have been raised about sustainability of US artificial intelligence boom. Investors have been fleeing US artificial intelligence stocks amid surprise at a new, cheaper but still effective alternative Chinese technology. DeepSeek is a Chinese artificial intelligence (AI) company based in Hangzhou that emerged a couple of years ago from a university startup. Its stated goal is to make an artificial general intelligence – a term for a human-level intelligence that no technology firm has yet achieved. It’s not there yet, but this may be one reason why the computer scientists at DeepSeek have taken a different approach to building their AI model, with the result that it appears many times cheaper to operate than its US rivals.
Another reason it appears to have taken the low-cost approach could be the fact that Chinese computer scientists have long had to work around limits to the number of computer chips that are available to them, as result of US government restrictions. The company has been quietly impressing the AI world for a while with its technical innovations, including a cost-to-performance ratio several times lower than that for models made by Meta (Llama) and OpenAI (Chat GPT). It hasn’t been making as much noise about the potential of its breakthroughs as the Silicon Valley companies. They have been pumping out product announcements for months as they become increasingly concerned to finally generate returns on their multibillion-dollar investments. But expect to see more of DeepSeek’s cheery blue whale logo as more and more people around the world download it to experiment.
