The Chinese app Deepseek hammering US technology stocks with a cheaper open source AI model

Chinese AI-Startup Deepseek is gaining attention in Silicon Valley as the company seems to almost match the capacity of chatbots like Openai’s Chatgpt, but to a fraction of the development costs.

Deepseek has risen in popularity in global app stores since the app was released earlier this month, after being downloaded 1.6 million times on January 25 in the US and ranked No. 1 in iPhone app stores in Australia, Canada, China, Singapore, USA and UK as opposed to Chatgpt and other major AI competitors are Deepseek Open Source, allowing developers to offer their own improvements to the software.

The company revealed R1, a specialized model designed for complex problem solving, on January 20, which “zoomed in to the global top 10 in performance” and was built much faster with fewer, less powerful AI chips at a much lower cost than other US US models, According to the Wall Street Journal.

Meta’s Chief AI scientist Yann Lecun went to social media to talk about the app and its quick success.

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A Chatbot app developed by the Chinese AI company Deepseek (Getty Images / Getty Images)

He pointed out In a post on threads, That what stabbed him most about Deepseek’s success was not the increased threat created by Chinese competition, but the value of keeping AI models open source so that anyone could benefit from it.

“It’s not that China’s AI ‘surpasses the US’, but rather that ‘open source models surpass proprietary models’,” Lecun explained.

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The new potential of open source AI development caused waves in the stock market, causing some traders to sell shares in companies like NVIDIA that develop the computer chips typically needed for brute-force AI training.

In this photo illustration, the Openai logo is shown on a mobile phone screen with the Chatgpt logo in the background. (Photoillustration of Idrees Abbas/SOPA Images/Lightrock Via Getty Images/Getty Images)

It told experts to journal Deepseeks technology is still behind Openai and Google. However, it is a close rival despite using fewer and less advanced chips, and in some cases steps over that American developers consider significant.

From Saturday, Journal reported that the two models of Deepseek were ranked in the top 10 at the Chatbot Arena, a platform hosted by the University of California, Berkeley researchers assessing chatbot performance.

Signage outside Meta’s headquarters in Menlo Park, California, Thursday, February 1, 2024. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)

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While Deepseeks flagship model is free, the journal reported that the company charges users connecting their own applications to Deepseeks model and computer infrastructure.

Fox Business’ Stepheny Price contributed to this report