What is China's DeepSeek and why is it shaking up the AI world?

Start-up's chatbot rivals the world's best and was seemingly developed at much lower cost

- 

DeepSeek, a Chinese AI start-up that is just over a year old, has stirred awe and consternation in Silicon Valley after demonstrating breakthrough artificial intelligence (AI) models that offer comparable performance to the world's best chatbots at seemingly a fraction of the cost.

DeepSeek's emergence may offer a counterpoint to the belief that the future of AI will require ever-increasing amounts of power and energy to develop.

Global technology stocks tumbled as hype around DeepSeek snowballed and investors began to digest implications for US-based rivals and hardware suppliers.

WHAT EXACTLY IS DEEPSEEK?

DeepSeek was founded in 2023 by Mr Liang Wenfeng, the chief of AI-driven quant hedge fund HighFlyer. The company develops AI models that are open source, meaning the developer community at large can inspect and improve the software. Its mobile app surged to the top of iPhone download charts in the US after its release in early January.

The app distinguishes itself from other chatbots like OpenAI's ChatGPT by articulating its reasoning before delivering a response to a prompt.

The company claims its new AI model, R1, offers performance on a par with OpenAI's latest and has granted licence for individuals interested in developing chatbots using the technology to build on it.

HOW DOES IT COMPARE WITH OPENAI OR META AI?

Though not fully detailed by the company, the cost of training and developing DeepSeek's models appears to be only a fraction of what is required for OpenAI or Meta Platforms' best products.

The model's much-better efficiency puts into question the need for vast expenditures of capital to acquire the latest and most powerful AI accelerators from the likes of Nvidia. That amplifies attention on US export curbs of such advanced semiconductors to China, which were intended to prevent a breakthrough of the sort that DeepSeek appears to represent.