In the last two months, the tech sector worldwide has witnessed one of the most innovative and shocking AI technologies ever: DeepSeek. Possessing advanced capabilities that make it a serious challenger to Open AI’s ChatGPT, Google Gemini and Meta’s Llama, DeepSeek has made headlines and disrupted tech like never seen before. With the growing debate around DeepSeek vs ChatGPT, many are wondering which AI model offers the best features and efficiency. So, what is DeepSeek? Most of you know, but for those oblivious to this, we explain it and how it disrupts the tech market. Let’s get started.
DeepSeek is a Chinese AI startup that was founded by entrepreneur and businessman Liang Feng in 2023. In January 2025, DeepSeek released the latest model, DeepSeek R1, a free AI-powered advanced chatbot offering similar aesthetics and functionalities to its rival, ChatGPT. Just like its similar counterparts, DeepSeek answers search queries, drafts text such as emails and documents, translates content and more.
However, the most interesting aspect of this technology is its low development cost and minimal use of resources. It is estimated that it took only $6 million worth of computing power from older Nvidia H800 chips to make this model, compared to $100 million used to train Open AI’s latest model, ChatGPT-4. If that isn’t exciting enough, there’s even more. According to the latest report from Reuters, the Hangzhou-based firm is all set to launch the successor to DeepSeek’s R1 model in early May 2025. Even though that’s the case, DeepSeek’s popularity has raised concerns regarding data security as the data is stored on Chinese servers, which can be leveraged by the Chinese authorities.
The release of the Chinese AI startup DeepSeek R1 has negatively affected most tech companies worldwide. This has to lead to AI-related stocks taking a massive hit. Nvidia, the world leader in AI computing and GPU manufacturing, recorded the biggest ever one-day loss of $593 billion, and its share price went down by 17%. Other companies, such as Broadcom, slumped to 17% of its market value.
As DeepSeek is trained using minimal resources that require less energy, this has raised concerns among companies that may result in lower power demand from the tech sector. Like it or not, DeepSeek is here to stay and continues to disrupt technology like never before. Despite the market share value loss, Nvidia has offered praise for DeepSeek, saying that it is an excellent AI advancement and a perfect example of test-time scaling.
According to CNBC, the Chinese artificial intelligence DeepSeek surpassed ChatGPT to become the most-downloaded free app in the U.S. on Apple’s App Store in January 2025. Even though that’s the case, the US Federal and state governments are seeking to introduce a government bill to block DeepSeek from government-owned devices. Amid this, Texas has officially become the first US state to ban DeepSeek due to rising concerns about national security. This move places the state at the forefront of a global movement against the app. Following suit, government agencies in South Korea, Taiwan, Italy & Australia have also limited access and banned the Chinese-owned AI model.
The primary reason behind this ban is the security risks posed by this application. Most countries don’t have a clear picture of how DeepSeek will handle the personal data of customers. Just like any other AI chatbot, DeepSeek collects personal information, chat history, and technical information and shares this data with service providers and advertising partners. Several reports claim that DeepSeek consists of hidden code in its programming that effectively shares user data directly to the Chinese government.
The majority of tech companies exploit user data in one way or another for targeted advertising and algorithmic refinement, and that’s a well-known fact. But why is DeepSeek treated differently? Since this is a product of the Chinese and has laws that effectively allow the Chinese government to access these data and use them for harmful purposes.
Even if you learn what is DeepSeek, you must also know why it’s different from its competitors. DeepSeek is an open-source large language model that relies on an inference-time computing method. This means that whenever users input a query, only the relevant portions of the model are activated. This approach minimizes cost and computation power.
Another major difference is the way the models are trained. It emphasizes reinforcement learning that takes lesser time, AI accelerators, and the cost to develop. Reinforcement learning, Emergent behavior network, Distillation and Reward engineering are some of the innovations that DeepSeek has developed as part of the R1 model.
Now that you understand what is DeepSeek and how it disrupts the tech sector, one question remains: Is DeepSeek an evolutionary phase of the existing AI models, or does it signal an impending market crash? When the world woke up to the news ”DeepSeek disrupts tech market”, this resulted in a panic mode that included mass AI-share sell-offs and stock values plummeting. However, if we look at history, whenever disruptive innovations are introduced, market volatility is not uncommon, which is then followed by market adjustments that result in adapting and growing with time.
Despite the security risks it poses, most industry experts suggest DeepSeek’s innovation as a transformative moment in AI development. As the technology showcases a high level of performance that is achieved with lower costs, DeepSeek essentially challenges the existing AI business models and encourages brands to reconsider their resource allocation strategies for their models. With more diversified players entering the playground, this can result in healthy competition that ultimately benefits consumers and the global economy.
DeepSeek has shown the world what it can achieve using a fraction of the cost and resources utilized by its competitors. Possessing several unique advantages, efficient training methods coupled with its open source policies, these technologies are challenging giants such as Open AI, Meta, and Google. Despite the chip restrictions, they are achieving rapid growth, which generates concerns in the tech industry.
However, we are yet to witness the true potential of this AI model and what it can achieve, provided they have sufficient resources and time. Do you wish to learn more about the DeepSeek effect? Then it’s high time you consult with GTECH, the best digital marketing company in UAE, specialising in AI, SEO, marketing, and crafting the next generation of web experiences.
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