News Desk
- Chinese app’s entry wipes $1tr off US stocks
- Commentators call it AI’s “Sputnik moment”
- Tech CEO warns of China’s breakneck advancement
ISLAMABAD: A shocking Chinese AI advancement called DeepSeek is sending shockwaves across the AI world, especially in the US.
Tech and political commentators are calling it AI’s “Sputnik moment” as the Chinese upstart entry to the tech arena wiped $1 trillion off US stocks.
US President Donald Trump jumped in to call it a “wake-up call” as Nvidia lost nearly $600 billion in market value.
Microsoft CEO Satya Nadella took to social media hours before markets opened to argue less expensive AI was good for everyone. He, however, warned of China’s breakneck advancement in the sector.
Amid the frenzy, everyone is curious to ask what DeepSeek is and how it shook the AI industry and dented America’s swagger.
What is DeepSeek?
DeepSeek is a new artificial intelligence chatbot named after the Chinese start-up that built it.
The company says its latest AI models are at par with industry-leading models in the US – such as ChatGPT – at a fraction of the cost.
It has revealed a stunning capability, presenting a ChatGPT-like AI model called R1, which has all the familiar abilities, operating at a fraction of the cost of OpenAI’s, Google’s or Meta’s popular AI models.
Researchers behind the app have said it only took $6 million (£4.8m) to build it, much less than the billions spent by AI companies in the US, according to BBC.
The app rocketed to the top of Apple’s App Store in the US over the weekend.
🚨BREAKING NEWS!!!!
It’s only been few days since China Deepseek R1 dropped & it’s INSANE!
SPOILER: ChatGPT is now behind.
Here are 10 incredible examples: pic.twitter.com/Xs3GVKQ15s
— The AI Colony (@TheAIColony) January 27, 2025
Who founded DeepSeek?
The company was founded in 2023 by Liang Wenfeng in Hangzhou, a city in southeastern China.
Liang, a 40-year-old information and electronic engineering graduate has also founded the hedge fund that backed DeepSeek.

Who is using it?
The app is available for download online at the company’s website and Apple’s App Store.
The service is free of charge for everyone. It has also become the top-rated free application in the US on Apple’s app store.
What does the app do?
DeepSeek operates similarly to ChatGPT as a powerful AI assistant.
According to its description on the App Store, it is designed “to answer your questions and enhance your life efficiently”.

Comments left by users rating the app say “It gives the writing more personality”.
What makes DeepSeek different?
According to BBC, one thing that distinguishes DeepSeek from competitors such as OpenAI is that its models are “open source” — meaning key components are free for anyone to access and modify, though the company hasn’t disclosed the data it used for training.
But what’s attracted the most admiration about DeepSeek’s R1 model is what Nvidia calls a “perfect example of Test Time Scaling” — or when AI models effectively show their train of thought, and then use that for further training without having to feed them new sources of data.
🛠️ DeepSeek-R1: Technical Highlights
📈 Large-scale RL in post-training
🏆 Significant performance boost with minimal labeled data
🔢 Math, code, and reasoning tasks on par with OpenAI-o1
📄 More details: https://t.co/jWMxMVhGAQ🐋 4/n pic.twitter.com/mIUBn3qJhQ
— DeepSeek (@deepseek_ai) January 20, 2025
“It’s just thinking out loud, basically,” Lennart Heim, a researcher at Rand Corp, told BCC.
According to AFP, tech investor and Trump ally Marc Andreessen declared “Deepseek R1 is AI’s Sputnik moment,” referencing the 1957 launch of Earth’s first artificial satellite by the Soviet Union that stunned the Western world.