The latest version of DeepSeek was released on January 20, and it impressed AI experts. What sets DeepSeek apart from others is the company’s claim that the new release was built at a fraction of the cost of industry-leading models such as OpenAI.
This led to significant market impact, with chip-making giant Nvidia losing nearly $600 billion (£482 billion) in market value on Monday—marking the biggest one-day loss in the US history. US President Donald Trump called DeepSeek release a “wake-up call” for US companies, urging them to focus on “competing to win.”
The model is reportedly as powerful as OpenAI’s O1 model, released at the end of last year, in tasks such as mathematics and coding. Like O1, DeepSeek’s R1 model is a “reasoning” model.
These models produce responses incrementally, simulating how humans reason through problems or ideas. DeepSeek uses less memory than its competitors, which ultimately reduces the cost to perform tasks. Similar to many other Chinese AI models, such as Baidu’s Ernie or ByteDance’s Doubao, DeepSeek is trained to avoid politically sensitive questions.