DeepSeek is a Chinese startup that has built, what appears to be, a very advanced artificial intelligence app in just two months for less than $US10 million.
It was built by an R&D team of fewer than 200 people using outdated, unloved and cheap microchips.
It appears to require much less data-centre space than the US models and is far more energy efficient.
For context, Meta supremo Mark Zuckerberg has boasted he has spent about $US500 billion to create an AI data centre roughly the size of Manhattan to keep up in the AI race.
President Donald Trump has also committed about $US500 billion of taxpayers’ hard-earned to keep US exceptionalism flying in the AI space, not to mention various export bans on chips and technology.
All that effort and investment, much of which has been supplied by money pouring into the likes of advanced chip maker Nvidia, is now in question.
“The DeepSeek news has triggered a rethink on the AI revolution and arguably one of the pillars of the current US exceptionalism. If R1 is as good as first impressions seem to suggest, then demand for sophisticated chips, infrastructure (think data centres) and energy may not be as large as originally thought,” NAB’s Rodrigo Catrill noted while observing Nvidia’s crash overnight.
In just a matter of hours since DeepSeek release of its free chatbot (a ChatGPT alternative) called R1 it has surged to the top of Apple’s iPhone downloads and Google’s Play store.
The AI race is well and truly on.
