While US companies have been the ones talking about AI for years, one Chinese startup is about to disrupt the global tech landscape – and challenge its American competitors at a much lower cost.
Founded in December 2023 by Chinese entrepreneur Liang Wenfeng, Deepseek is a new player in the AI space. And yet the company has gotten worldwide attention with an AI model, DeepSeek R1, that can supposedly match OpenAI at a fraction of the cost. Released to the public on January 20, DeepSeek’s AI assistant dethroned ChatGPT in the U.S. a week later. So overwhelmed with demand that it had to temporarily shut down access to its AI model.
DeepSeek’s rapid rise sent shockwaves across global markets and triggered a $1 trillion tech stock rally in the US and Europe. Nvidia, the leading AI chipmaker, saw the biggest market cap loss in US history with its stock price dropping 17% and losing $600 billion in market value. This was made even more painful since the Chinese company claims to have trained its AI models for just $5.6 million compared to the billion dollar investments of its American competitors.
Many tech observers, including Silicon Valley investor Marc Andreessen, called DeepSeek’s breakthrough “AI’s Sputnik moment”. Although it’s unclear what innovations DeepSeek will bring to the table, its emergence is challenging the narrative that only US giants can win in the AI space. President Donald Trump called the launch of DeepSeek a wake up call for the US tech industry and many are pushing back against this new player.
DeepSeek’s performance has sparked accusations that it’s copying off the investments and technology of its US peers, with OpenAI implying some of its competitors are using a machine learning technique called distillation to transfer knowledge from large models to smaller ones. Despite these allegations, CEO Sam Altman said his company has no plans to sue DeepSeek and instead will just keep building great products. It’s not just the tech industry that’s getting in on the act. US Senator Josh Hawley has introduced a bill to fine American individuals up to $1 million and American companies up to $100 million for using the Chinese chatbot. Not gonna happen but it shows how far some US politicians are willing to go on AI.
DeepSeek’s rise has also raised security concerns, with countries like Australia and South Korea blocking access to the model for government employees.Italian authorities halted its use over concerns about its processing of private data. And the AI chatbot doesn’t want to talk about sensitive topics about Chinese politics and history.
Still, this Chinese rival is a big deal in the AI world – one that could change the landscape of global tech. As the tech giants are doubling down on AI, with Google just announced a new agentic era, Retail and Manufacturing are actively exploring how AI can optimize productivity and reduce cost.
First to jump on the AI bandwagon was the gaming industry, which has integrated AI into its development process to make the game more immersive. Google just teamed up with the makers of Hay Day and Clash of Clans to test how its AI agents interpret game rules. Built with Gemini 2.0, these agents can suggest to players in real-time.
AI is also making headway in online gaming, iGaming platforms are using AI to give a personalized experience by tailoring bonuses to a player’s interest and preference. For instance, free spins are available to slot enthusiasts to slot enthusiasts who want to spin the reels without spending real money. Players can select these casino bonuses to browse thousands of machine slots with no download. These promotional features are often part of welcome package to new users. Specialized websites details how to claim them safely, break down their wagering requirements.
While the entertainment industry is a leader in AI adoption, all industries are going through an AI revolution, whether to automate tedious tasks or predict consumer behavior. If controversial, the rise of DeepSeek will definitely shake the tech world. And the Hangzhou-based start-up is already recruiting young job seekers, embodying China’s big ambition in the AI race.