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The Chinese Artificial Intelligence (AI) model that threatens Western tech giants by being more affordable and efficient
Until this Monday, January 27, at 9 a.m. (CET), if we had asked you about Deepseek, very few would have been able to give a correct answer. For most, it would have sounded like Chinese. That perception changed within a few hours, and those who would feel the consequences the most were the major Western tech companies.
Deepseek is the Artificial Intelligence (AI) model developed by the Chinese company of the same name, establishing a completely new paradigm—entirely different from the approaches defended by tools developed by Silicon Valley multinational corporations.
Why Does It Threaten Existing AI Models?
Because Deepseek is significantly more affordable to produce, more efficient, and open-source. Experts claim that this language model can compete with ChatGPT. While the fourth version of OpenAI's tool cost about $80 million to develop, the current version of its Chinese counterpart required an investment of only $5.5 million. The difference is staggering.
Additionally, as explained in an interview on Catalunya Ràdio by Karina Gibert, Dean of the Official College of Computer Engineers and Director of the Artificial Intelligence Research Center at the Polytechnic University of Catalonia (UPC), Deepseek is open-source, meaning it can be downloaded, modified, and improved: "It’s a completely different business model," she states.
Listen to Karina Gibert’s interview on 'Catalunya nit'
Stock Market Crash
The emergence of Chinese AI had an immediate impact on companies dedicated to chip manufacturing, as Deepseek will likely require fewer and cheaper chips. On January 27, Nvidia, the world’s leading chip manufacturer, plummeted by as much as 16% in the stock market, losing approximately half a trillion dollars in value. This marked the worst single-day drop ever experienced by a company in history.
The collapse of the Nasdaq, the index comprising over 5,000 tech companies, came just a week after the President of the United States, Donald Trump, announced the launch of the Stargate project—a private-sector investment of up to $500 billion to build artificial intelligence (AI) infrastructure in the U.S.
How Does Deepseek Work?
For the user, Deepseek's AI chat operates like any other model. It offers a home screen with a text input field and various functionality options. When presenting results, there’s a left-hand column displaying a history of the questions asked.
The difference lies in its internal functionality, as it has been developed through pure reinforcement learning, without relying on pre-labeled data. This technical milestone allows the model to learn on its own through trial and error.
Find more information about how Deepseek works
Doubts About the Chinese Model
Given that Deepseek is a tool of Chinese origin, developed under the laws of the Asian giant, some doubt its ability to answer all types of questions. However, according to Karina Gibert, ideological bias is present in any existing AI model. She emphasizes the importance of distinguishing between whether the code itself incorporates censoring mechanisms or whether it simply lacks the material needed to address specific queries. In any case, "since it’s open-source, we can modify the model and provide it with this information."
Moreover, if you’re concerned about where your data goes when using Deepseek (indeed, the tool collects information provided through your searches, as stated in its Privacy Policy), you have the option to download the application and work offline from your own device, thus preventing data leaks.
Learn how to work with Deepseek offline
One way or another, the landscape has undergone a revolution, and we must closely monitor the tug-of-war between tech giants on both sides of the Pacific to see which business model ultimately prevails.
