A Chinese AI company that rivals ChatGPT, is gaining attention in Silicon Valley with its rapid rise, nearly outperforming leading American AI companies like OpenAI and Meta.
DeepSeek is a Chinese AI startup that develops open-source large language models (LLMs), according to the company’s website.
The company unveiled R1, a specialized model designed for complex problem-solving, on Jan. 20, which “zoomed to the global top 10 in performance,” and was built far more rapidly, with fewer, less powerful AI chips, at a much lower cost than other U.S. models, according to the Wall Street Journal.
The announcement of the latest version of the app happened on President Donald Trump’s Inauguration Day as another Chinese-owned social media app, TikTok, was making headlines about whether it would be banned in the U.S.
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Meta’s Chief AI scientist, Yann LeCun, took to social media to speak about the app and it’s rapid success.
He pointed out in a post on Threads, that what stuck out to him most about DeepSeek’s success was not the heightened threat created by Chinese competition, but the value of keeping AI models open source, so anyone could benefit.
“It’s not that China’s AI is ‘surpassing the US,’ but rather that ‘open source models are surpassing proprietary ones,’” LeCun explained.
“DeepSeek has profited from open research and open source (e.g. PyTorch and Llama from Meta) They came up with new ideas and built them on top of other people’s work,” LeCun continued. “Because their work is published and open source, everyone can profit from it. That is the power of open research and open source.”
Just days after the release of the latest version of DeepSeek, Meta CEO Mark Zuckerberg announced his company was planning on spending over $60 billion in 2025 as it remains steadfast on AI.
Meta’s latest move aims to bolster the company’s position against rivals OpenAI and Google in the race to dominate AI.
Big Tech firms have been investing tens of billions of dollars to develop AI infrastructure after the success of OpenAI’s ChatGPT.
Meta’s announcement came just days after Trump announced that OpenAI, SoftBank and Oracle will form a venture called Stargate and invest $500 billion in AI infrastructure across the U.S.
“Deepseek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen,” Marc Andreessen, a Silicon Valley venture capitalist who has been advising Trump, wrote in a post on X. “And as open source, a profound gift to the world.”
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“DeepSeek R1 is AI’s Sputnik moment,” Andreessen wrote in a comment.
Alexandr Wang, CEO at Scale AI, a San Francisco-based software company, also spoke out on the technology and said DeepSeek’s quick success is a “wake-up call for America.”
“DeepSeek is a wake up call for America, but it doesn’t change the strategy,” Wang wrote in a post on X.
Wang explained that the “USA must out-innovate & race faster, as we have done in the entire history of AI” and “tighten export controls on chips so that we can maintain future leads.”
“Every major breakthrough in AI has been American,” Wang said.
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DeepSeek’s development was led by a Chinese hedge-fund manager, Liang Wenfeng, who has become the face of the country’s AI push, the Journal wrote.
Experts told the Journal that DeepSeek’s technology is still behind OpenAI and Google. However, it is a close rival despite using fewer and less-advanced chips, and in some cases skipping steps that U.S. developers consider essential.
As of Saturday, the Journal reported that the two models of DeepSeek were ranked in the top 10 on Chatbot Arena, a platform hosted by University of California, Berkeley researchers that rates chatbot performance.
While DeepSeek’s flagship model is free, the Journal reported that the company charges users who connect their own applications to DeepSeek’s model and computing infrastructure.
FOX Business’ Breck Dumas and Reuters contributed to this report.
