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Chinese artificial intelligence (AI) app DeepSeek has overtaken ChatGPT and other rivals to become the top-rated free application on Apple’s App Store in the US, UK and China.<\/p>\n
The app has surged in popularity since its launch in January, challenging the widely-held belief that America is the untouchable leader of the AI industry.<\/p>\n
It is powered by the open-source DeepSeek-V3 model, which its researchers claim was developed for less than $6m – significantly less than the billions spent by rivals.<\/p>\n
But this claim has been disputed by others in the AI space.<\/p>\n<\/div>\n
After DeepSeek-R1 was launched earlier this month the company boasted of<\/a> “performance on par with” one of ChatGPT maker OpenAI’s latest models – when used for tasks such as maths, coding and natural language reasoning.<\/p>\n Silicon Valley venture capitalist and Donald Trump advisor Marc Andreessen described DeepSeek-R1 as “AI’s Sputnik moment”<\/a>, in a reference to the first artificial Earth satellite that was launched by the Soviet Union in 1957.<\/p>\n Advanced chips power the training of AI models like ChatGPT and DeepSeek.<\/p>\n But since 2021 the US government has widened its restrictions on advanced chips being sold to China.<\/p>\n In order to continue their work without steady supplies of imported advanced chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.<\/p>\n This has resulted in AI models that require far less computing power than before. It also means that they cost a lot less than previously thought possible, which has the potential to upend the industry.<\/p>\n Shares in AI-related companies based in the US, such as Nvidia, Microsoft and Meta were down on Monday morning.<\/p>\n Some estimates put the cost of training DeepSeek at a fraction of the large US AI firms. <\/p>\n “It can potentially derail the investment case for the entire AI supply chain, which is driven by high spending from a small handful of hyperscalers,” Singapore-based technology equity advisor Vey-Sern Ling told the BBC.<\/p>\n But Wall Street banking giant Citi cautioned that while DeepSeek could challenge the dominant positions of American companies like OpenAI issues faced by Chinese firms could hamper their development.<\/p>\n “We estimate that in an inevitably more restrictive environment, US’ access to more advanced chips is an advantage,” its analysts said in a report.<\/p>\n Last week, a consortium of US tech firms and foreign investors announced The Stargate Project,<\/a> a company which is putting $500bn into AI infrastructure in Texas.<\/p>\n<\/div>\n The company was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China. <\/p>\n The 40-year-old, an information and electronic engineering graduate, also founded the hedge fund that backed DeepSeek. <\/p>\n