A Chinese artificial intelligence startup has raised alarm in the U.S. by adversely affecting tech stocks and indicating trade restrictions have not been effective in hurting the communist country's advancement in technology.
DeepSeek, which is little more than a year old, offers comparable performance to the world's best chatbots at seemingly a fraction of the cost, Bloomberg reported.
Tech pioneer Marc Andreessen, who co-founded Netscape, called DeepSeek "one of the most amazing and impressive breakthroughs I've ever seen," in a post on X.
U.S. stocks on Monday dropped sharply after DeepSeek presented a ChatGPT-like AI model called R1, which has all the familiar abilities of OpenAI's, Google's or Meta's popular AI models, CNN reported.
DeepSeek said training one of its latest models cost $5.6 million, compared with the $100 million to $1 billion range cited last year by Dario Amodei, CEO of the AI developer Anthropic, as the cost of building a model, The Wall Street Journal reported.
R1's better efficiency raises question concerning the need for vast expenditures of capital to acquire the latest and most powerful AI accelerators from companies such as Nvidia Corp.
The New York Times reported that Meta has tasked several teams of engineers with closely examining DeepSeek to see how CEO Mark Zuckerberg's company can improve its company's own Llama AI software.
R1's performance comes despite the U.S. government having banned the export of high-end technologies, such as GPU semiconductors to China, in a bid to stall Beijing's advances in AI.
DeepSeek's chatbot suggests Chinese AI engineers have worked their way around the restrictions with limited resources, Bloomberg reported.
Unlike OpenAI's ChatGPT, R1 articulates its reasoning before delivering a response to a prompt.
DeepSeek was founded in 2023 by Liang Wenfeng, the chief of AI-driven quant hedge fund High-Flyer, which develops AI models that are open-source.
That means although DeepSeek, as a Chinese company, won't answer questions on sensitive topics such as those involving Chinese President Xi Jinping, modifications to the software can change that, according to developers, the Times reported.
During the weekend, DeepSeek shot to the top of Apple's App Store charts, rivaling ChatGPT, the Times reported.
The company's mobile app surged to the top of U.S. iPhone download charts after its early January release.
Charlie McCarthy ✉
Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.
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