By Stu Woo
Here's what you need to know about DeepSeek, the artificial-intelligence phenomenon that is roiling global technology stocks.
What is DeepSeek?
It is a Chinese AI company whose models, such as the recently introduced R1 for complex problem-solving, have notched high performance ratings. A DeepSeek app is currently top in iPhone download rankings for the U.S.
Why are investors worried about DeepSeek?
The conventional thinking was that AI companies needed expensive, leading-edge computer chips to train the best systems. That has justified huge spending by the biggest U.S. tech companies, such as Alphabet and Meta Platforms, which are sometimes known as hyperscalers.
But DeepSeek didn't have that financial firepower-and its models are still roughly on par with top U.S. rivals. DeepSeek says it uses less-advanced chips, combined with innovative model-training techniques.
Why is DeepSeek relying on cheaper technology?
It's hard for DeepSeek to buy cutting-edge chips because of U.S. export controls, intended to hinder Chinese organizations from developing innovative AI for military purposes.
Who is behind DeepSeek?
Chinese hedge-fund manager Liang Wenfeng is behind DeepSeek's development. The busineess grew out of the AI research unit of his $8 billion hedge-fund firm, High-Flyer.
Is DeepSeek really a disaster for AI stocks?
Not everyone thinks DeepSeek has upended the AI-infrastructure industry. While DeepSeek might have found a way to cut AI training costs, AI demand keeps surging, and tech companies still need more computing power, wrote Stacy Rasgon, a Bernstein semiconductor analyst.
"Is DeepSeek doomsday for AI buildouts?" Rasgon and his colleagues wrote in a report on Monday. "We don't think so."
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(END) Dow Jones Newswires
January 27, 2025 04:38 ET (09:38 GMT)
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