DeepSeek AI is China's latest generative artificial intelligence and is already drawing international attention. Similar to ChatGPT, its model, called DeepSeek R1, promises performance comparable to OpenAI's GPT-4, but with one major advantage: a drastically lower development cost—only US$6 million, compared to the more than US$100 million invested by OpenAI.

What Sets DeepSeek R1 Apart?

The key differentiator of DeepSeek R1 lies in its incremental reasoning approach, like how humans solve problems. Additionally, its technology was developed using an efficient strategy that combines high-performance chips with more affordable options, in contrast to Western companies that rely heavily on Nvidia.

Market Impact: Nvidia in Decline

DeepSeek's success has created uncertainty among investors, challenging the notion that only cutting-edge chips can support advanced artificial intelligence. On January 27, 2025, news of DeepSeek's breakthrough hit the financial markets, causing the Nasdaq index to drop 3% and directly affecting semiconductor and AI companies.

Nvidia, which had recently become the most valuable company in the world, saw its market value plunge from US$3.5 trillion to US$2.9 trillion, allowing Apple and Microsoft to reclaim the lead. Experts believe that DeepSeek's efficiency may pressure giants like OpenAI and Nvidia to justify the high costs of their technologies.

Privacy and Security: Regulators on Alert

Governments around the world have already expressed concerns regarding privacy and security with DeepSeek. In Australia, the AI has been banned from government devices, and on January 30, Italy blocked the application, demanding that the company cease processing data from Italian users.

The root of the debate? DeepSeek's data is stored on servers in China, raising suspicions about potential state surveillance and the Chinese government's access to user information.

International Reactions and Potential Consequences

DeepSeek's breakthrough has resonated globally. The current U.S. President, Donald Trump, described the innovation as a "wake-up call," urging American companies to accelerate their investments in AI to remain competitive.

Meanwhile, Chinese state media celebrated DeepSeek as a milestone in China's technological independence. However, experts warn of the risk of fragmentation in the AI market, with Chinese and Western systems evolving in isolation, which could hamper international collaboration.

Content Control

Like other Chinese artificial intelligences, such as Ernie (Baidu) and Doubao (ByteDance), DeepSeek avoids politically sensitive topics. When questioned by the BBC about the Tiananmen Square Massacre, the AI refused to provide details, reflecting the strict censorship imposed by the Chinese government.

This stance raises questions about algorithmic bias and the limitation of access to information, which may affect DeepSeek's credibility among users seeking an impartial view of global events.

Who Is Behind DeepSeek?

DeepSeek was founded in December 2023 by Liang Wenfeng, an entrepreneur with experience in both technology and finance. Before creating the AI, Liang led High-Flyer, an innovative hedge fund that used artificial intelligence for quantitative trading in China.

Now, with DeepSeek, his goal is to position China at the forefront of technological innovation, establishing the country not merely as a follower but as a global leader in artificial intelligence.

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Want to learn more about the impact of DeepSeek AI? Read the full BBC article here.