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(Bloomberg) -- Chinese startup DeepSeek’s eponymous AI assistant rocketed to the top of Apple Inc.’s iPhone download charts, stirring doubts in Silicon Valley about the strength of America’s lead in AI.
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The app’s underlying artificial intelligence model is widely seen as competitive with OpenAI and Meta Platforms Inc.’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain.
Chinese tech firms linked to DeepSeek, such as Iflytek Co., surged on Monday, while chipmaking tool makers from Netherlands’ ASML Holding NV to Japan’s Advantest Corp. slumped on the potential threat to demand for Nvidia Corp.’s AI accelerators. US stock index futures also tumbled amid concerns that DeepSeek’s AI models may disrupt US technological leadership.
Lauded by investor Marc Andreessen as “one of the most amazing and impressive breakthroughs,” DeepSeek’s assistant shows its work and reasoning as it addresses a user’s written query or prompt. Reviews on Apple’s app store and on Alphabet Inc.’s Android Play Store praised that transparency. The app topped the free downloads chart on iPhones in the US and is among the most downloaded productivity apps in the Play Store.
Founded by quant fund chief Liang Wenfeng, DeepSeek’s open-sourced AI model is spurring a rethink of the billions of dollars that companies have been spending to stay ahead in the AI race.
“While it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term, initial worries are centered on whether US tech giants’ pricing power is being threatened and if their massive AI spending needs re-evaluation,” said Jun Rong Yeap of IG Asia.
Like all other Chinese-made AI models, DeepSeek self-censors on topics deemed politically sensitive in China. Unlike ChatGPT, DeepSeek deflects questions about Tiananmen Square, President Xi Jinping or the possibility of China invading Taiwan. That may prove jarring to international users, who may not have come into direct contact with Chinese chatbots earlier.
The initial success provides a counterpoint to expectations that the most advanced AI will require increasing amounts of computing power and energy —- an assumption that has driven shares in Nvidia and its suppliers to all-time highs.