DeepSeek’s success is remarkable given the constraints faced by Chinese AI companies in the form of increasing US export controls on cutting-edge chips from the likes of Nvidia, and limited access to Taiwan Semiconductor Manufacturing Corp’s (TSMC) state-of-art chip plants or tools, and equipment made by Dutch firm ASML. Clearly, these measures are not working as intended. Rather than weakening China’s AI capabilities, the sanctions may be driving start-ups like DeepSeek to innovate in ways that prioritise efficiency, resource-pooling and collaboration.
The news that China’s generative artificial intelligence (Gen AI) lab DeepSeek has seemingly usurped OpenAI’s pioneering ChatGPT’s position as the most downloaded free app on Apple’s App Store sent AI-related stocks reeling on Jan 27. The US$1 trillion ($1.36 trillion)stock-market rout was one of the worst in history, hammering hard stocks with exposure to AI. Chip giant Nvidia went from the world’s largest firm by market value to No. 3. Within days, however, it had pipped software giant Microsoft to take the No. 2 place behind iPhone-maker Apple.
The emergence of DeepSeek is being seen as the first visible challenge to costlier models such as OpenAI and Anthropic, and raised questions over the hundreds of billions in planned spending on the technology by the likes of Microsoft, Instagram’s owner Meta Platforms and Alphabet’s Google. “DeepSeek achieved competitive performance with significantly fewer resources, using only 2,048 graphics processing units (GPUs) for 57 days compared to the 16,000 to 100,000 GPUs typically required,” notes Morgan Brown, vice-president for product development and growth at cloud storage firm Dropbox. The upstart AI lab demonstrated that high-performing AI models can be built with fewer resources than previously thought necessary and that China has developed advanced AI capabilities despite US export controls on high-end GPUs.
