There’s a growing rivalry in the field of artificial intelligence, especially with the recent emergence of the Chinese startup DeepSeek. This company claims to have developed an AI model that can compete with major U.S. players like OpenAI and Meta while being significantly more affordable.

Former President Trump stated that the way DeepSeek operates efficiently should alert U.S. tech firms and revealed plans for a substantial push in AI development, including a $500 billion investment to surpass international competition, according to YSL News.

How DeepSeek is Changing the Game for ChatGPT and Other AI Models

DeepSeek claims that developing its DeepSeek-V3 model costs under $6 million, according to GitHub, in stark contrast to the $100 million OpenAI invested in its latest ChatGPT model. Following the announcement of DeepSeek’s model, Nvidia, a key AI chip manufacturer, experienced its largest single-day stock drop in U.S. history, although it has since recovered.

Why is DeepSeek Gaining Popularity? How It Offers Affordable AI Solutions

The company reportedly utilizes less sophisticated chips to run its AI, potentially allowing it to operate at a fraction of the cost—20 to 50 times cheaper—compared to the countless millions currently being invested in AI by U.S. tech firms.

DeepSeek’s AI technology is open source, allowing users to access and modify it for free. As a result, it has quickly climbed to the top of the Apple App Store’s Top Free Apps category, outpacing downloads of both ChatGPT and Google apps.

What is DeepSeek?

Founded in 2023, DeepSeek is a startup from China that has introduced AI models named DeepSeek-V3 and DeepSeek-R1, which are claimed to meet or even surpass the capabilities of several well-known U.S. AI models.

Increased AI Competition from Alibaba and ChatGPT

In the wake of DeepSeek’s launch, Alibaba unveiled an AI model that they assert outperforms DeepSeek’s, as reported by Reuters. The well-known Chinese e-commerce giant’s Qwen 2.5 AI model adds further excitement to the AI competition in the tech landscape.

Not wanting to be outdone, OpenAI has also introduced its ChatGPT Gov AI tool this week, designed for use by government entities while adhering to strict safety protocols.

DeepSeek Under Scrutiny

However, DeepSeek is facing challenges.

According to the Financial Times, DeepSeek reportedly utilized OpenAI’s model to develop its own software, presenting supporting evidence for this claim. Additionally, DeepSeek’s chatbot has been reported to have an 83% failure rate when providing news and information, according to Reuters, often resulting in inaccurate or vague responses.

Moreover, security issues have arisen, as the software experienced cyberattacks on Monday, which temporarily disrupted user registration. Given its ties to China, the AI could evoke security concerns, akin to those surrounding TikTok and Rednote.