Most Americans had probably never heard of the Chinese tech startup DeepSeek at the start of 2025, but that changed in dramatic fashion within just a few short weeks.
By the end of January, DeepSeek's artificial intelligence (AI) assistant, DeepSeek-R1, had surged past OpenAI's ChatGPT to become the most popular free app in Apple's App Store in the U.S.
According to Mashable, DeepSeek-R1 outperforms ChatGPT for technical tasks like coding or complex mathematical equations, and performs similarly for many other types of queries, though ChatGPT still retains an edge for conversational output. And unlike ChatGPT with its paid service tiers and proprietary coding, DeepSeek is an open source system that users can freely access and adapt for any purpose.
The most shocking difference between DeepSeek and its rivals? According to Scientific American, the company claims that R1 relies on reduced-capacity chips and costs just a tenth as much to run as its competitors. Chipmaker stocks promptly crashed, and industry leader Nvidia's market cap fell by $589 billion in one day — the biggest single-day loss in stock market history, according to Yahoo Finance. U.S. tech stocks have since stabilized, but the uncertainty remains.
Not everyone is buying what DeepSeek is selling, though — according to Inc., some tech CEOs have suggested that DeepSeek is lying about its low tech chips. In an interview with CNBC, Scale AI CEO Alexander Wang, said that he believed DeepSeek instead possessed about 50,000 Nvidia H100 chips, which cannot legally be sold to Chinese companies for national security reasons.
And the national security issues don't end with just chips. According to Wired, all user information is stored on servers located in China.
