Deepseek, a Chinese AI developer, has sharpened the technology and financial world with a revolutionary approach to artificial intelligence.
While companies such as OpenAi and Meta Platforms invest billions in advanced AI models, Deepseek has achieved striking results with only a fraction of those resources. This raises questions about the need for enormous investments and the effectiveness of American export restrictions.
In this article we discuss what Deepseek is and why investors are so nervous.
Why does the US sound alarm?
The US government has strict export restrictions on advanced AI chips, such as that of Nvidia, to delay China’s technological progress. However, Deepseek has shown that efficiency is at least as important as brutal computing power.
With only $ 1.4 million in starting capital, Deepseek was founded in 2023. In November 2024, the company presented the Deepseek R1-Reashing model, which was designed to simulate human reasoning. This model is the core of the Deepseek-Chatbot, a cheap alternative to OpenAi’s Chatgpt, and already has 1.6 million downloads. Tech investor Marc Andreessen even called Deepseek “Ai’s Sputnik moment,” referring to the Soviet rocket that reached a job around the earth in 1957 and shocked the West.
What are the consequences?
Where Chinese tech giants such as Alibaba, Baidu and Tencent struggle with hardware shortages and competition, Deepseek opts for an open-source approach. This allows the company to quickly build a large user file and benefit from lower development costs.
Deepseek’s efficient approach has led to a price war within the AI industry. American AI giants such as OpenAi could be forced to lower their prices. Moreover, asking about the enormous investments in Western AI infrastructure. If cheaper models with less resources can be competitive, is the sector not overvalued?
The impact is not limited to the technology sector. Even within the cryptomarkt, AI-related coins are seriously affected, which underlines broader financial uncertainty.
The limitations of Deepseek
Although Deepseek achieves impressive results, there are also comments. It remains a Chinese product and is subject to censorship. For example, the chatbot refuses to answer questions about sensitive topics such as the protests on Tiananmenplein or the status of Taiwan.
In addition, the Platform is experiencing technical problems due to the sudden rise in popularity, leading to malfunctions.
The core of the story
Deepseek has proven that advanced AI models are not dependent on expensive hardware, but that efficiency is a crucial factor. This development puts Western AI giants under pressure and forces the US to revise their export restrictions.
The rise of Deepseek shows that the rules of the game change, with major consequences for technology companies and financial markets worldwide.
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Source: https://newsbit.nl/wat-is-deepseek-en-waarom-laat-het-de-financiele-wereld-beven/
