China-based DeepSeek AI Robotics was founded in 2023, but until January 24, 2025, almost no one had heard of it. Then, almost overnight, DeepSec became the hottest topic of discussion in the world of artificial intelligence. This raises a big question for American investors and tech companies: Why are American companies spending billions of dollars when DeepSeek supposedly did it for several million dollars?
The latest Chinese chatbot, the app, had already dethroned American rivals ChatGPT (OpenAI), Gemini (Google), and others on Monday, becoming the undisputed No. 1 free app on the Apple App Store. According to Beijing-based Chinese technology news site Bandili, “DeepSeek” is the first Chinese app to reach the top of the rankings for both the US and Chinese versions of the iPhone App Store on Monday, January 27, 2025. The Chinese app’s rapid and sudden progress has come as a surprise to Silicon Valley giants, especially since the company behind the launch of the new chatbot a week ago is a very small company.
DeepSeek is based in Hangzhou, the capital of eastern China’s Zhejiang Province. Local data shows that “Liang Wenfeng,” co-founder of hedge fund High Flyer, holds a major stake in the company. The fund said on its official WeChat account in March 2023 that it was “starting over” and would increase resource allocation to form “a new independent research group to explore the essence of artificial general intelligence.”. DeepSec is also known for offering AI engineers the most attractive salaries in China.
The first model of the new chatbot “DeepSec-R1,” launched by a Chinese startup on January 20, 2025, was able to compete with the American artificial intelligence giants with amazing and remarkable speed. The new chatbot launched by the Chinese AI startup DeepSeek a week ago did not take long to disrupt the sector, as it quickly became competitive with major American companies, especially thanks to its cost, which is at least ten times lower than its competitors. Does this new technological phenomenon threaten the economic model of OpenAI after it actually caused the shares of Silicon Valley giants to fall on the stock exchange?
The launch of the Chinese chatbot DeepSeek has sparked a wave of change in the artificial intelligence technology sector, after it quickly surpassed OpenAI’s ChatGPT to become the most downloaded free iPhone app in the United States, which caused a huge loss for chipmaker Nvidia, which amounted to about $600 billion in market value in a single day, setting a new record in the US stock market. DeepSeek is a free AI chatbot in China, similar to ChatGPT, that its developers say is designed to “answer your questions and improve your life efficiently.”. It represents a breakthrough in the world of AI in terms of its training and development.
China’s DeepSec may prove that it doesn’t take huge resources to build complex AI models. We’ll likely see powerful AI models being developed with increasingly fewer resources as companies look for ways to train and run models more efficiently. The US’s “big tech” companies have so far dominated the AI sector, and US President Donald Trump has called the rise of China’s DeepSec a “wake-up call” for the US tech sector.
Currently, emerging industries represented by artificial intelligence and robotics are rapidly rising in China, with “artificial intelligence” becoming a high-frequency term recently. Innovations like DeepSeek and humanoid robots have attracted worldwide attention. There are many observations and expectations regarding the development of China’s independent innovation capabilities. China continues to enhance its scientific and technological innovation capabilities. China ranked first in the world in the number of patent applications in 2022 and ranked 12th in the Global Innovation Index 2023. China has steadily strengthened its scientific and technological innovation capabilities, becoming the world’s largest country in terms of human resources and the number of R&D personnel.
A report by the People’s Daily said that “scientific and technological innovation has contributed to China’s economic growth, with investment in high-tech industries increasing by 11.1 percent year-on-year from January to October 2022.”. Innovation has also opened up new areas for China’s economic development, such as renewable energy vehicles, lithium batteries, and photovoltaic products.
China’s scientific and technological innovation has attracted global attention, as China has become an important participant in international cutting-edge innovation, and it plans to continue to strengthen its scientific and technological innovation capabilities to promote high-quality economic development.
China is seriously embracing DeepSeek to accelerate the country’s AI growth. DeepSeek will contribute 20 to 30 basis points to China’s economy by 2030. DeepSeek has made a major leap forward in China’s AI landscape, becoming a major driver of adoption across sectors, and these achievements make it a more effective and affordable alternative to its US competitors. The impact of AI integration through DeepSeek is expected to begin to be felt on China’s economic growth as early as next year, 2026. This is expected to contribute to a 20-30 basis point increase in China’s long-term GDP by 2030.
In a move that reflects the government’s strong support, Chinese President “Xi Jinping” personally welcomed DeepSeek founder “Liang Wenfeng” to a recent high-level meeting, giving him a front-row seat among the country’s top business leaders. The recognition underscores China’s commitment to AI-driven economic growth.
Major Chinese companies, such as Alibaba, Huawei, and Tencent, are also seizing the opportunity to integrate DeepSeek’s technology into their operations. These companies are looking to apply AI solutions to cloud computing, financial services, and smartphone technology, boosting the digital transformation and innovation of the Chinese economy. The adoption of AI promises to deliver significant productivity gains in China at home and abroad. DeepSeek’s rapid rise and the Chinese government’s strategic support reflect China’s broader ambitions to lead the global AI revolution. With these factors, DeepSeek is not only shaping China’s AI ecosystem but also redefining the country’s economic trajectory in the years to come.
Accordingly, it seems likely that smaller companies like DeepSeek in China will play an increasing role in developing AI tools that could make our lives easier, and it would be a mistake to ignore that.
