DeepSeek, a Chinese AI startup, recently saw its iOS app climb to the top of Apple’s App Store just days after launching its DeepSeek R1 reasoning model. This success has placed DeepSeek above OpenAI’s ChatGPT, which now holds second place.
Key Factors Behind Popularity
DeepSeek R1 has reportedly outperformed several competing models in key benchmarks. In testing, it proved effective in tasks like web design and chess improvement.
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The app’s rise in popularity can be attributed to two main factors: its open-source nature and affordable pricing. DeepSeek offers free access to its web and mobile apps, while its API pricing is considerably lower than that of OpenAI’s advanced models. Over the weekend, social media threads showcased users running DeepSeek on modest hardware and performing complex tasks, further driving its success.
Impact on the Tech Market
As a result, DeepSeek now leads Apple’s App Store and ranks 20th on Google Play. This rapid growth has potential consequences for the U.S. tech market, particularly for Nvidia, the top company by market cap. Reports suggest that DeepSeek has been built with far fewer resources compared to U.S.-based models like Meta’s Llama and OpenAI’s ChatGPT, which could reduce demand for Nvidia’s hardware in AI applications. This shift has contributed to a 3.2% decline in NASDAQ futures ahead of Monday’s market opening.
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DeepSeek’s chatbot operates similarly to ChatGPT, handling tasks like mathematics and coding with the power of models like OpenAI’s o1. DeepSeek R1, which is also a reasoning model, uses less memory, making tasks more affordable to perform.
However, the app’s censorship of politically sensitive topics, such as the Tiananmen Square incident, has raised concerns. Despite these challenges, DeepSeek has managed to train its model at a fraction of the cost, reportedly spending $6 million compared to OpenAI’s over $100 million. DeepSeek’s rapid success was momentarily interrupted by large-scale malicious attacks, leading to temporary registration restrictions.
