The DeepSeek AI app has overtaken ChatGPT as the top free app on Apple’s App Store in the US, UK, and China. Built at a fraction of competitors’ costs, DeepSeek’s rapid rise challenges global AI industry leaders. Analysts warn its success could disrupt the AI market and supply chain.
Overtaking Rivals and Disrupting the Market
DeepSeek, a Chinese AI app, has surpassed ChatGPT to become the top free app on Apple’s App Store in the US, UK, and China. Since its January launch, DeepSeek has gained massive popularity, challenging the notion that the US dominates the AI industry.
Powered by the open-source DeepSeek-V3 model, the app’s development reportedly cost under $6 million—far less than the billions spent by competitors. However, some in the AI community have questioned this claim. DeepSeek-R1, unveiled earlier this month, boasts performance comparable to OpenAI’s latest models in tasks like math, coding, and language processing.
Marc Andreessen, a Silicon Valley investor and advisor to Donald Trump, called DeepSeek-R1 “AI’s Sputnik moment,” likening it to the Soviet Union’s launch of the first artificial satellite in 1957.
Low-Cost Innovation and Industry Concerns
Advanced chips are essential for training AI models, but US restrictions on selling advanced chips to China have pushed Chinese developers to innovate. By sharing resources and exploring new methods, they’ve created AI models that require less computing power and cost significantly less. This shift could disrupt the industry and challenge rivals who rely on costly infrastructure.
US-based companies like Nvidia, Microsoft, and Meta experienced stock declines after DeepSeek’s rise. In Europe, shares of AI-related firms such as ASML and Siemens Energy also plummeted. Fiona Cincotta, a senior market analyst at City Index, noted the surprise of a low-cost Chinese AI model entering the market.
The development raises concerns about profitability for established players who have heavily invested in expensive AI systems. Singapore-based equity advisor Vey-Sern Ling suggested DeepSeek’s emergence could disrupt the global AI supply chain. However, Citi analysts cautioned that Chinese firms face challenges, including limited access to advanced chips, which could hinder their growth.
Founding and Vision of DeepSeek
Liang Wenfeng founded DeepSeek in 2023 in Hangzhou, southeastern China. The 40-year-old information and electronic engineering graduate also established the hedge fund that financed the company.
Liang reportedly stockpiled Nvidia A100 chips, now banned for export to China, pairing them with cheaper, imported chips to create DeepSeek. Experts estimate he amassed around 50,000 high-end chips, enabling the app’s development.
In a 2024 interview with The China Academy, Liang expressed surprise at the reaction to DeepSeek’s earlier versions. “We didn’t expect pricing to be such a sensitive issue,” he said. “We simply followed our calculations and set prices accordingly.”
Liang was recently seen meeting Chinese Premier Li Qiang alongside industry experts, further highlighting DeepSeek’s growing influence.
