A small Chinese company recently took the tech world by storm with news that it had created a high-performance artificial intelligence system that has less computing power and costs less than those made by giant US tech companies.
Until now, U.S. tech giants have led the race to build the most advanced artificial intelligence systems. They rely on giant data centers and sophisticated microchips, and say they need more money to pay for more energy and more powerful chips.
Now comes DeepSeek.
The Chinese startup has created an artificial intelligence (AI) system that matches the performance of US-made AI systems. But DeepSeek says it spends less money and uses less computing power to run the system than its US counterparts.
The news was like a bombshell in Silicon Valley. The DeepSeek app shot to number one on the Apple App Store. Share prices of US tech companies plunged and Washington, which sees the US in a fierce artificial intelligence race with China, watched the rapid developments closely.
“The launch of DeepSeek AI from a Chinese company should serve as a reminder to our industry that to win this competition, we must be very focused,” Trump said.
The United States has instituted strict export controls to stop the highest-end chips from entering China. DeepSeek claims that working within the constraints helped them find a cheaper solution.
Olaf Groth, an expert at the University of California, Berkeley Haas School of Business, said, “This is a cheap, low-cost innovation that is much faster and much cheaper to deploy, both to build and to deploy. It will have a very broad appeal to a lot of people.”
DeepSeek’s breakthrough has shaken Silicon Valley. Especially since DeepSeek relies on open source technology , shared and built by coders across companies and countries. This is a different approach from most AI giants like Microsoft and Google, who keep their work secret.
But two years ago, Facebook parent company Meta released the code for Llama – its cutting-edge AI technology – so that others could use it to innovate. DeepSeek used Llama to teach its AI models and then released its technology to the open-source community.
Olaf Groth returns. “The open source community feels very strongly that open source is a very important way because it democratizes, as it were, the creation and use of artificial intelligence at a lower cost.”
Some observers say DeepSeek's presence calls into question the effectiveness of recent U.S. artificial intelligence policies. President Donald Trump has previously said he would make AI a priority.
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