A Chinese start-up called DeepSeek has been making waves in the tech industry with its artificial intelligence model and chatbot, which rivals OpenAI’s products. The company claims to have developed its models using fewer chips from Nvidia, a leading AI chip supplier, at a cost of $5.6 million compared to OpenAI’s reported $100 million.
However, DeepSeek’s arrival has been met with controversy, with Australia, Taiwan, and Italy banning government workers from using the company’s products due to security concerns. The US Navy and Pentagon have also reportedly banned members and staff from accessing the technology.
DeepSeek’s chatbot provides similar capabilities to ChatGPT but censors questions considered politically controversial in China. OpenAI has developed its own reasoning models and recently released one for free, which may be a response to DeepSeek’s open-source language model.
Some experts raise concerns about the security risks posed by DeepSeek, citing the company’s collection of personal information and potential data exposure. Tech-savvy users can download DeepSeek’s model and run it on their own hardware, but casual users are more likely to use the company’s chatbot.
The impact on Nvidia’s stock price is also noteworthy, with a decline of 11% by the end of January due to increased competition from AI-related stocks. While DeepSeek may reduce reliance on Nvidia’s chips, the company itself appears to be more reliant on GPUs than initially thought.
DeepSeek’s open-source model could encourage more organizations to build AI tools, but this may lead to increased demand for GPUs, maintaining market demand despite reduced need for some companies like Nvidia.
Source: https://www.marketplace.org/2025/02/05/what-you-should-know-about-the-chinese-start-up-deepseek