Chinese AI model DeepSeek jolts industry
Chinese AI start-up DeepSeek’s latest AI model reportedly beat ChatGPT in downloads on Apple’s US chart, with analysts arguing the release indicates it is possible to develop powerful models at much lower cost.
The company introduced its DeepSeek-R1 AI model last week putting it into direct competition with OpenAI’s ChatGPT. The new mobile rose to top of the free app download listing in Apple’s App Store for the US region and topped the same rankings in China, China Daily reported.
China Daily stated the release sent “shockwaves” through the US tech industry because it is open source and was developed at “an exceptionally low cost”.
The model is powered by less-advanced chips than are typically used to run AI workloads: Bloomberg reported it sparked debate about being more cost-effective and raising doubt on the validity of the high valuations for companies such as Nvidia and ASML.
UBS estimated the DeepSeek-R1 model costs $0.55 per million input tokens and $2.19 per million output tokens, compared with $15 and $60, respectively, for OpenAI’s o1 model.
The use of lower-cost chips also questions the need for the many US export controls put in place to restrict China’s access to advanced chips and slow the country’s development of AI tools.
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