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Chinese startup DeepSeek has released a new open-sourced âlow costâ artificial intelligence model R1, rivalling ChatGPT, earning both appreciations and concerns from tech experts in Silicon Valley.
The AI company, which seems to match OpenAIâs newer 01 model in several benchmarks, claimed in a study that it spent less than $6 million to train its model compared to the hundreds of millions of dollars that American companies pour in to train theirs.
After âcomprehensive evaluationsâ, DeepSeek said its AI model âoutperforms other open-source models and achieves performance comparable to leading closed-source modelsâ.
âDespite its strong performance, it also maintains economical training costs,â DeepSeek researchers wrote.
The AI startupâs achievement has come despite US sanctions denying China access to advanced semiconductors such as Nvidiaâs H100 GPUs, and DeepSeek refining its algorithms by optimising less sophisticated H800 chips.
Hancheng Cao, an assistant professor in information systems at Emory University, hailed the AI model as a âtruly equalising breakthroughâ.
DeepSeekâs model could be âgreat for researchers and developers with limited resources, especially those from the Global South,â Dr Cao told MIT Technology Review.
The R1 app has quickly climbed to the top spot among free apps in the Apple App Store, just ahead of ChatGPT, sparking a debate on whether the Chinese firm was posing a threat to its American competitors.
Alexandr Wang, chief of San Francisco-based software company Scale AI, called the new AI modelâs quick success a âwake-up call for Americaâ.
âUSA must out-innovate and race faster, as we have done in the entire history of AI and tighten export controls on chips so that we can maintain future leads,â he said.
But some are hopeful that the AI modelâs success could be shot in the arm for its American competitors, due to the Chinese companyâs approach of prioritising cost efficiency and open source research.
âIf training models get cheaper faster and easier, the demand for inference (the real world use of AI) will grow and accelerate even faster, which assures the supply of compute will be used,â Y Combinator chief Garry Tan posted on X.
Metaâs chief AI scientist Yann LeCun said the modelâs success reflects on the âpower of open research and open source.â
âPeople who see the performance of DeepSeek and think: âChina is surpassing the US in AIâ You are reading this wrong,â the Meta scientist said.
âThe correct reading is: âOpen source models are surpassing proprietary onesâ,â he wrote in a post on Threads.
Venture capitalist Marc Andreessen called Deepseek R1 âone of the most amazing and impressive breakthroughsâ.
âDeepSeek R1 is AIâs Sputnik moment,â he said in a post on X.
Despite these observations, much about the Chinese startup behind the AI model remains obscure.
DeepSeek was founded in July 2023 by Liang Wenfeng, an alumnus of Zhejiang University, and incubated by High-Flyer, a hedge fund that he started in 2015.
The companyâs employees reportedly consist of fresh graduates from Chinese universities like Peking University and Tsinghua University.
âThe emergence of Chinaâs DeepSeek indicates that competition is intensifying, and although it may not pose a significant threat now, future competitors will evolve faster and challenge the established companies more quickly,â Charu Chanana, chief investment strategist at Saxo Markets told Bloomberg News.
