"Mysterious Eastern Power" Impacts US Stocks! What is DeepSeek that everyone is talking about?

On January 27, local time, the Nasdaq stock index fell 3% as the model of Chinese artificial intelligence company DeepSeek attracted the attention of American investors.

The rise of DeepSeek, the "mysterious Eastern power" impacts the US stock market

On January 27, local time, the U.S. stock market fell sharply at the opening, with the technology sector being particularly hard hit. Market analysts believe that the core reason is the latest breakthrough of DeepSeek, a Chinese artificial intelligence startup, which has shaken the "invincible" position of the U.S. technology industry.

This month, deep-learning company DeepSeek released its latest open source model R1 on the opening day of the World Economic Forum 2025 Annual Meeting, attracting global attention.

It is reported that the R1 model has achieved an important technological breakthrough - using pure deep learning methods to allow AI to spontaneously develop reasoning capabilities. In tasks such as mathematics, code, and natural language reasoning, its performance is comparable to the official version of OpenAI's o1 model, and its design cost is less than $6 million, far lower than the hundreds of millions or even billions of dollars invested by American technology giants.

What is DeepSeek?

DeepSeek, the full name of which is Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd., was established on July 17, 2023. It is an innovative technology company focused on developing advanced large language models (LLMs) and related technologies.

In Silicon Valley, DeepSeek has long been called "the mysterious power from the East" and is one of the "Six Little Dragons of Hangzhou" that are hotly discussed online.

At the end of 2024, DeepSeek released a new generation of large language model V3 and announced that it would be open source. Test results show that its multiple evaluation scores surpass some mainstream open source models and it also has cost advantages.

Liu Wei, director of the Human-Computer Interaction and Cognitive Engineering Laboratory at the School of Artificial Intelligence at Beijing University of Posts and Telecommunications, said that the biggest advantage of DeepSeek lies in the improvement and optimization of the algorithm, which saves computing power and data . In the past, if OpenAI was "big power to create miracles", now DeepSeek is "small power can also create miracles" - small computing power can also create miracles with new methods.

DeepSeek R1 API price. Image source: DeepSeek

According to the company, the R1 model has achieved an important breakthrough in technology - using pure deep learning methods to allow AI to spontaneously emerge with reasoning capabilities. In tasks such as mathematics, code, and natural language reasoning, its performance is comparable to the official version of the o1 model of the OpenAI Research Center (OpenAI), and the model also continues the company's high cost-effectiveness. The model performance is catching up very quickly. OpenAI launched the official version of the o1 model in December 2024. Just over a month later, DeepSeek released the R1 model with comparable performance.

Screenshot of the chat interface with DeepSeek

Market analysts believe that the launch of the model by China Deepsearch is like a "bomb", causing the market to doubt the competitiveness of the US technology industry. It has caused investors to question the leading advantages of US companies, the scale of investment, and whether these expenditures will bring profits, leading to a sell-off of AI-themed stocks.

CCTV reporter interviewed Nasdaq Vice Chairman Michael McCoy at the Nasdaq exchange. Michael McCoy said that he believed DeepSeek would be an important part of the revolution in the field of artificial intelligence.

It is reported that the DeepSeek application has replaced its competitor OpenAI's ChatGPT to become the most downloaded free application in the US Apple App Store. At present, the mobile application developed by DeepSeek has surpassed ChatGPT and topped the free application list in the US region of the Apple Mobile App Store.

Image source: CCTV News

After going viral overseas, DeepSeek’s service demand has surged. According to media reports, DeepSeek’s AI (artificial intelligence) service has experienced multiple outages, which may be related to the surge in visits after the release of the new model.

Open source: Where is the future heading?

DeepSeek adopts a completely open source strategy, which not only lowers the threshold for users, but also promotes the collaborative ecology of the AI ​​developer community . Through open source, DeepSeek has attracted the attention of a large number of developers and researchers and promoted the development of AI technology. NVIDIA AI scientist Jim Fan praised DeepSeek as "truly open cutting-edge research that empowers everyone."

The success of DeepSeek is seen by some as a manifestation of China's technological idealism, and is even likened by foreigners to a mysterious oriental force.

But open source also faces challenges such as protecting intellectual property rights and maintaining order in the open source community.

According to reports, open source is just a business model, and even open source projects have copyrights. The debate between open source and closed source is essentially a comparison of the effectiveness of different business models in specific scenarios and eras.

However, from the perspective of the entire AI large model industry, DeepSeek's success may represent a new development direction - improving model performance through algorithm optimization rather than relying solely on computing power and data volume . This direction also provides new ideas for the development of the AI ​​large model industry.

Comprehensive sources: Xinhuanet, CCTV.com, Economic Daily, Science and Technology Daily, etc.