(Bloomberg) — Talk of an artificial-intelligence upstart in China behind a formidable ChatGPT rival had been constructing for days.
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On the World Economic Forum in Davos last week, some mentioned Hangzhou-based DeepSeek and its recently released R1 model as a chief reason for countries akin to the US to be doubling down on AI advancements. On tech chat boards, engineers had begun comparing its programming performance to leading models from the likes of OpenAI and Microsoft Corp. Its product quietly rose through the ranks of top performers on a UC Berkeley-affiliated AI leaderboard.
Then, throughout the past 36 hours, interest within the startup exploded. Silicon Valley heavyweights including investor Marc Andreessen and AI godfather and chief Meta Platforms Inc. scientist Yann LeCun began piling into the conversation, with Andreessen calling DeepSeek’s model “one of the amazing and impressive breakthroughs” he’s ever seen.
By the top of the weekend, DeepSeek’s AI assistant had rocketed to the highest of Apple Inc.’s iPhone download charts and ranked among the many top downloads on Google’s Play Store, straining the startup’s systems a lot that the service went down for greater than an hour. The corporate was eventually forced to limit signups to those with mainland China telephone numbers — but claimed the move was the results of “large-scale malicious attacks” on its services.
The fallout from the seemingly overnight surge in interest around DeepSeek was swift, and severe: The corporate’s AI model, which it claims to have developed at a fraction of the fee of rivals without meaningfully sacrificing performance, sparked a $1 trillion rout in US and European technology stocks as investors questioned the spending plans of a few of America’s biggest firms. A decline within the shares of AI chipmaker Nvidia Corp. alone erased a record amount of stock-market value from the world’s largest company.
By Monday afternoon, it was clear the overwhelming interest in DeepSeek’s services was taking a toll on the corporate’s system. “Currently, only registration with a mainland China cell phone number is supported,” the startup said on its status page. DeepSeek didn’t specify whether the signup curbs are temporary or how long they are going to last.
It was the corporate’s longest major outage because it began reporting its status. Unlike some rivals, DeepSeek’s assistant shows its work and reasoning because it addresses a user’s written query or prompt. Reviews on Apple’s app store and on Alphabet Inc.’s Android Play Store praised that transparency.