What Is DeepSeek AI? Here's What We Know About the Company That's Shaking the Tech World
Some people are calling this a one-two punch. China has now twice proven that America's sense of superiority may be unearned.
Published Jan. 27 2025, 12:33 p.m. ET
2025 appears to be the year of Chinese companies giving America a serious run for their money. Not only did Americans flock to Chinese-owned RedNote when it looked like TikTok would be banned, but they have now produced a generative AI program that rivals some of America's best.
That program? DeepSeek AI. The newest player on the AI board is shaking things up everywhere. Not just in the tech world, but in the stock market and across the world as its arrival portends potential doom for what the United States assumed was its global domination in the field of AI. So what is DeepSeek AI? Here's what we know about the program and why it's causing such a stir.
What is DeepSeek AI? The tech world is rattled, and here's why.
America has long rested on her laurels, assured in her dominance of the tech world, and especially the up-and-coming world of AI. From ChatGPT to AI search engines embedded in companies like Microsoft, the world has thus far been steered in its exploration of AI from Washington, Silicon Valley, and other tech fortresses in the United States.
DeepSeek AI promises to upend that trend.
DeepSeek AI's R1 program is like ChatGPT. It's an AI program designed to answer questions, generate "thoughtful" responses, and communicate with the user on an endless number of topics. The learning tool is meant to offer a variety of services, just like ChatGPT or Meta's Llama, and is as user-friendly as talking to your pals.
The company behind DeepSeek was founded in 2023 by a Chinese hedge fund manager named Liang Wenfeng. Although he is no stranger to those in the tech know, R1 and DeepSeek AI's public launch seemingly came out of nowhere, and its appearance has rattled the world from the foundations of the tech world on through the stock market.
The stock market is reacting strongly to DeepSeek's release.
But why? Why is one more AI program causing such a big stir? It all comes down to money and global domination in the tech sector.
The United States has been going full steam ahead on generative AI and AI programs for the past five to 10 years. President Donald Trump has made U.S. domination in tech a centralized part of his agenda, but he's not the only one. Just before leaving office, former President Joe Biden increased restrictions on exporting AI chips with the goal of preventing a leap forward in technology among rivals like China.
Yet here comes DeepSeek, and it seems clear that China can make the advancements with or without American AI chips.
Furthermore, the cost of DeepSeek has unraveled everything the American tech industry has claimed about the cost of launching, updating, and upkeeping AI programs.
For example, Meta announced that they would be investing upward of $65 billion in AI in 2025. Overall, CBS News says that American companies will invest around $1 trillion in AI in the next few years. Yet the cost to launch DeepSeek? It's reported to be just $5.6 million.
If China can outproduce American companies and do so much, much cheaper, then the global domination that American tech companies have been assured of goes out the window suddenly.
There's one point to note, however. The $5.6 million number is an analysis estimate. If accurate, it's a staggering number that changes many things about tech domination in the world.
If it's inaccurate, however, it still raises the question: Does America really offer anything that extraordinary?
When Americans flocked to RedNote, they were made aware that the Chinese people enjoy a much higher quality of life than they previously assumed. Add that to the fact that it's clear China can at least produce an on-par AI program in a relatively short amount of time, for what could potentially be pennies compared to American investments, and suddenly the global landscape has shifted.
Some people are calling this a one-two punch. China has now twice, in a relatively short amount of time, proven that America's sense of superiority may be unearned.
It remains to be seen how far-reaching and enduring these revelations will be. But DeepSeek has exploded onto the scene and brought some big changes and even bigger questions with it.