Chinese AI Advancement DeepSeek is Making a Splash

On January 2025, DeepSeek, a one-year-old Chinese startup, revealed its AI model called R1, which has all the abilities of ChatGPT. The surprising part? It only costs a fraction of the price. While OpenAI has claimed that the AI industry would need trillions of dollars in investment to develop the necessary in-demand chips for complex models—DeepSeek, on the other hand, spent just $5.6 million on its base model. As a result, Nvidia, the leading supplier of chips, lost nearly $600 billion in market value, and their stocks plummeted more than 17%. This is the most value a stock has ever lost in a single day, with the previous record of $240 billion set by Meta nearly three years ago. More significantly, some interpret DeepSeek’s impact as a sign that the seat of AI power is shifting eastward. The billion-dollar investment plans announced in the US were unreplicable elsewhere, but DeepSeek just proved that may no longer be a problem. 

The question on all of our minds is: Is DeepSeek or ChatGPT better? An article from the BBC compared the two in terms of answering different kinds of questions. Javier Aguirre, an AI researcher at Samsung Medical Center in Seoul, asked the platforms a tricky and complex coding. He found that ChatGPT o1 could not reason enough to solve the problem; DeepSeek, however, solved it immediately and was straight to the point. Similarly, the Tech Review Test Guide asked ChatGPT and DeepSeek ten prompts, such as “Summarize the key findings of the latest AI research paper on multimodal learning in 150 words” and “Write a Python function that takes a list of integers and returns a new list containing only the prime numbers from the original list.” Deepseek won nine out of ten prompts, providing more speedy, informative, and accurate responses, which leads the source to conclude that DeepSeek was the ultimate winner of the duel. 

The release of DeepSeek’s R1 model has sent shockwaves through the AI industry. With its ability to outperform other models while operating at a fraction of the cost, DeepSeek’s success raises questions about the future of AI and whether the US will remain at the forefront.