DeepSeek in plain terms: Why everyone’s talking about it

What is DeepSeek?

DeepSeek is a new artificial intelligence (AI) tool that works like ChatGPT. It can answer questions, help with writing, and perform other tasks that AI models are designed for.

Like other AI models, Deepseek produces responses similar to human ones. But what makes it different is that it was built with less memory and at a much lower cost than its American competitors. It also does not respond to politically-sensitive questions.

Who created DeepSeek?

DeepSeek was founded in December 2023 by a Chinese businessman named Liang Wenfeng. Wenfeng, unlike other typical tech entrepreneurs, comes from a finance background and runs a hedge fund called High-Flyer. Liang has been vocal about China's need to move from copying Western technology to leading in innovation.

His dreams appear to have come true because his company’s latest AI model, DeepSeek R1, is now making waves globally.

How does DeepSeek work?

Like other AI models, DeepSeek processes large amounts of information to generate text responses. It is particularly good at reasoning-based tasks, such as solving math problems and writing code. The company claims it was developed for just $6 million, a fraction of what American companies like OpenAI spend.

Instead of relying on the most advanced AI chips, DeepSeek reportedly used a mix of older and newer chips to achieve its results.

This has challenged the belief that only the most expensive technology can build high-quality AI models.

Why is DeepSeek taking over the tech world?

DeepSeek’s success has shocked the tech industry particularly because AI is known to be extremely expensive to develop, with companies like Meta and OpenAI spending billions of dollars. The catch here is how DeepSeek has been able to achieve similar results at a much lower cost, with questions of how this could change how AI is built worldwide.

The model’s launch sent shockwaves through financial markets. Nvidia, a major chipmaker, lost nearly $600 billion in market value in a single day as investors worried that cheaper AI development could reduce demand for high-end chips. Other major US tech companies also saw stock prices drop.

Beyond finance, DeepSeek raises big political questions. The US has restricted China’s access to advanced AI chips, hoping to slow down its progress. But DeepSeek’s success suggests that China is still moving forward in AI development, despite these limitations. The Chinese government has celebrated the achievement, seeing it as a step toward technological independence.

What’s next?

While DeepSeek’s rise is shaking the world, there are still many questions. The company has not fully disclosed how much it spent on research before launching R1. There are also concerns about censorship, as DeepSeek avoids answering politically sensitive topics. Despite this, it has quickly become one of the most downloaded apps in the US, showing that users are eager to try it.

DeepSeek’s success is forcing tech companies to rethink how AI is developed especially with the option of building at a lower cost.

This could lead to an industry shift.

But while DeepSeek is currently reshaping the global conversation around AI and global technology power, the question remains how long it will last and what possible evolutions could emerge from such discussions for the tech world.