What is China's DeepSeek and why is it freaking out AI competitors?

financialpost.com:

DeepSeek, a Chinese AI startup that’s just over a year old, has stirred awe and consternation in Silicon Valley after demonstrating breakthrough artificial intelligence models that offer comparable performance to the world’s best chatbots at seemingly a fraction of the cost.

DeepSeek’s emergence may offer a counterpoint to the widespread belief that the future of AI will require ever-increasing amounts of power and energy to develop.

Global technology stocks tumbled in late January as hype around DeepSeek’s innovation snowballed and investors began to digest the implications for its U.S.-based rivals and their hardware suppliers.

DeepSeek was founded in 2023 by Liang Wenfeng, the chief of AI-driven quant hedge fund High-Flyer. The company develops AI models that are open-source, meaning the developer community at large can inspect and improve the software. Its mobile app surged to the top of the iPhone download charts in the U.S. after its release in early January.

The app distinguishes itself from other chatbots like OpenAI’s ChatGPT by articulating its reasoning before delivering a response to a prompt. The company claims its R1 release offers performance on par with OpenAI’s latest and has granted license for individuals interested in developing chatbots using the technology to build on it.

Though not fully detailed by the company, the cost of training and developing DeepSeek’s models appears to be only a fraction of what’s required for OpenAI or Meta Platforms Inc.’s best products. The much better efficiency of the model puts into question the need for vast expenditures of capital to acquire the latest and most powerful AI accelerators from the likes of Nvidia Corp. That also amplifies attention on U.S. export curbs