China-developed DeepSeek sends shockwaves through AI and tech markets

A newly revealed breakthrough in artificial intelligence could threaten to reshape the technology sector.

Known as DeepSeek, the Chinese developed AI model is intended as a competitor to OpenAI and its ChatGPT in the market for open-source machine learning models.

Unlike other machine learning platforms, DeepSeek presents itself as a machine learning platform that prioritizes operational efficiency. The AI tool claims to be able to run with a fraction of the computing power used by other machine learning models.

Less computing power means organizations can implement AI tools and components without the need to purchase exorbitant amounts of CPU and GPU hardware, a common gripe amongst those who develop and use AI platforms.

According to its developers, DeepSeek is able to perform machine learning and AI functions on a level similar to that of the latest versions ChatGPT.

“Through [reinforcement learning], DeepSeek-R1-Zero naturally emerges with numerous powerful and intriguing reasoning behaviors. However, it encounters challenges such as poor readability, and language mixing,” they wrote.

“To address these issues and further enhance reasoning performance, we introduce DeepSeek-R1, which incorporates multi-stage training and cold-start data before RL.”

In short, DeepSeek pitches itself as a way to make AI tools far easier and more efficient to use.

DeepSeek's sudden popularity also came with some drawbacks, as Reuters reported that the firm was limiting the number of new user registrations after a cyberattack caused outages on its website.

The release might not just be hype. Following publication of the DeepSeek AI model the stock market went into a frenzy.

Chipmaker Nvidia, long heralded as one of the hardware backbones of the AI revolution, saw its stock price drop by 17% on Monday as investors speculate that a more efficient AI model will crater demand for GPU hardware.

The release also lead some industry pundits to reassess their views on the AI landscape, once thought to exclusively be the domain of U.S. companies. The arrival of a popular Chinese-derived AI model would dramatically reshape the international market.

The release also comes at a time when AI is playing an important role in the development of the information security landscape. A recent study by the CyberRisk Alliance found that the overwhelming majority of organizations are either considering or already have integrated AI into their security approach.

The effect of AI is two-sided when it comes to the security landscape. On one hand, network defenders believe the tools can automate routine scans and data analysis, freeing up administrators to handle more complicated tasks.

On the other, it is feared that threat actors will be able to implement AI in their phishing and exploit scripts, increasing the likelihood of a successful network breach and data theft, creating more potent advanced persistent threat actors (APT) and ransomware attacks.