A new AI chatbot called DeepSeek became the no. 1 downloaded app in Apple's App Store Monday, driven by fierce consumer curiosity and prompting concerns that U.S. businesses could suddenly be losing ground in the AI technology race.
DeepSeek is a Chinese company founded in 2023. The company says its AI language model has capabilities on par with OpenAI's chatbot ChatGPT. It can be used the same way: to work out computer programming or math problems, to compose poetry or search the web for information. But the software also displays some strict censorship, such as when asked about the Chinese government.
Deepseek says it's also built its most recent AI models using lower-spec computer hardware, achieving its capabilities for a relatively low cost and without the cutting-edge chips from Nvidia that are currently banned in China.
The suggestion that big AI advancements could be possible without the expense of very latest hardware sent waves through the U.S. stock market. Stocks of chipmaker Nvidia, which has rocketed to one of the most valuable companies in the world on the back of AI demand, sank some 17% on Monday after DeepSeek's news broke.
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Some analysts think DeepSeek's announcement is as much about politics as it is about technical innovation.
"The timing of the release is political in nature," Gregory Allen, an AI expert at the Center for Strategic and International Studies, told The Associated Press. “Trying to show that the export controls are futile or counterproductive is a really important goal of Chinese foreign policy right now."
President Donald Trump said Monday the advancements could be economic good news for consumers but also were a "wakeup call for our industries that we need to be laser focused on competing to win."
In the same comments, Trump said he would place tariffs on foreign chips and semiconductors.
DeepSeek's developments come as U.S. AI companies prepare to invest big sums in their own projects.
Speaking from the White House one day after his inauguration, President Trump said executives from AI industry leaders OpenAI, Oracle and SoftBank have committed $100 billion initially — and up to $500 billion in total — into a project known as Stargate, which will include the construction of massive AI data centers in the U.S. over the next four years.
