Deepseek: There is a new fish in town and it's challenging USA's dominance in AI arena
- by CC Web Desk
- Jan 29,2025
The global AI landscape is witnessing a seismic with China’s DeepSeek, an Artificial Intelligence (A.I) company that has received phenominal attention for developing sophisticated AI models.
“The release of DeepSeek should be a wake-up call for our industries. We need to be razor-focused to win,” said U.S. President Donald Trump on Tuesday, reacting to the groundbreaking advancements showcased by the Chinese AI company.
DeepSeek is gaining enormous global attention for developing cutting-edge AI models that rival top-tier systems like OpenAI’s ChatGPT, but at a fraction of the cost and computational resources.
Reports indicate that DeepSeek’s flagship model, DeepSeek-R1, delivers performance comparable to leading AI models like GPT-4, yet it was developed on a budget of just $6 million, whereas its US-based rivals required $100 million+ investments.
The rise of DeepSeek has already had a profound impact on the tech industry. Major U.S. companies have seen significant market value declines, with Nvidia losing a staggering $593 billion in market value—the largest single loss in U.S. stock market history. Other tech giants, including Alphabet and Microsoft, have also experienced notable declines, signaling a potential shift in the balance of power in the AI sector.
What sets DeepSeek apart is its focus on efficiency and affordability. The company’s latest generation of AI models not only competes with established U.S. systems but also operates at a fraction of the cost. DeepSeek’s models are reportedly 30 times cheaper to run on older hardware compared to traditional U.S.-based AI systems, offering a significant advantage for researchers and businesses seeking cost-effective alternatives.
Another key differentiator is DeepSeek’s commitment to open-source development. Unlike its U.S. rival ChatGPT, which is a proprietary model developed by OpenAI, DeepSeek’s source code is publicly available, allowing anyone to view, modify, and distribute it. This open-source approach fosters innovation and collaboration, potentially accelerating the adoption of DeepSeek’s technology worldwide.
DeepSeek’s global ambitions are already taking shape. Its Android application is now available in India, one of the largest and fastest-growing markets for tech-based products. If DeepSeek continues to release advanced AI models and gains widespread popularity, the U.S. could face significant challenges to its AI business aspirations.
The timing of DeepSeek’s rise is particularly striking, coming just as U.S. tech giants ramp up their efforts to maintain their edge in AI. Last week, Oracle and OpenAI announced the launch of Stargate, an ambitious $500 billion project described as “the largest AI infrastructure initiative in history.” Backed by SoftBank, Stargate aims to develop the physical and virtual infrastructure needed to power the next generation of AI advancements.
As the AI race intensifies, DeepSeek’s emergence as a cost-effective, open-source alternative poses a serious challenge to U.S. dominance.