DeepSeek challenges US AI dominance with low-cost innovation

Chinese AI startup DeepSeek has shaken the global AI industry with its low-cost, high-performance models, sparking mixed reactions among leading US developers. Its flagship AI assistant recently surpassed OpenAI’s ChatGPT as the most downloaded app on Apple’s US App Store. DeepSeek achieved this using Nvidia’s H800 chips, training its model for under $6 million—an astonishing contrast to the billions spent annually by US tech giants.

While some American AI experts acknowledged DeepSeek’s achievements, many remain unconvinced. OpenAI’s CEO, Sam Altman, praised the R1 model for its cost-effectiveness, but analysts noted that the $6 million figure only reflects the final training phase, with total development costs likely exceeding $1 billion. Nvidia viewed DeepSeek’s success as evidence of growing demand for its AI chips, despite US export controls aimed at slowing China’s progress.

US-based firms like Snowflake have already added DeepSeek models to their AI offerings, citing overwhelming customer interest. However, concerns about China‘s involvement in AI technology persist. DeepSeek’s decision to release its models as open source has drawn applause from industry leaders, highlighting a shift toward more accessible AI development.

With China’s advancements narrowing the gap in AI innovation, competition between US and Chinese firms intensifies. DeepSeek’s rapid rise is forcing industry players to rethink their strategies, while questions about scalability and long-term sustainability remain unanswered.