China's DeepSeek reaches the top position on the App Store, surprising AI researchers and causing American tech stocks to plummet.

The intelligent Chinese conversational bot DeepSeek, designed to compete with ChatGPT, is currently the most downloaded app in the App Store after its performance surprised American companies.

The Chinese startup seems to claim the performance of OpenAI's ChatGPT even though it cost much less to develop, and this is sinking the market values of the main AI players in the United States...

Bloomberg Report.

The Chinese startup DeepSeek saw its AI assistant rise to first place on Apple Inc.'s iPhone download charts, sparking doubts among semiconductor valley about the strength of the American leader in AI.

The underlying artificial intelligence model of the app is widely seen as competitive with those of OpenAI and Meta Platforms Inc. The claim that it cost much less to train and develop has generated movements of actions along the Asian supply chain.

Reviews praise the app for being as good as the professional version of ChatGPT, with DeepSeek also appreciated for showing its work, giving more confidence in its results. We recently reported that this is something to monitor.

Surprising Waves Through Silicon Valley

VentureBeat supports that AI experts agree that DeepSeek is truly competitive with the best models in the United States.

The open-source access of DeepSeek-R1, its high performance and the fact that it seems to have "appeared suddenly" to challenge the previous leader of generative artificial intelligence have deeply affected Silicon Valley and beyond, based on conversations and readings by various engineers, thinkers, and leaders [...].

The web entrepreneur Arnaud Bertrand did not hesitate to warn about the surprising consequences of DeepSeek's success, writing on X: "There is nothing to highlight about how deep this changes the game. And it is not just with respect to artificial intelligence, but also a severe criticism of the attempted ban on Chinese technological developments by the United States, without which Deepseek might not have been possible (as they say, necessity is the mother of invention).

DeepSeek Uses Advanced Software, Not Hardware.

Generative AI models are powered by Nvidia GPUs. OpenAI's mass chatbots, Google, and Anthropic use more than a million of these. US export restrictions on advanced technologies have allowed DeepSeek to obtain only around 50,000 GPUs, which means it is providing results similar with only 10% of the processing power.

It notes that this decision forced the Chinese company to focus on software.

Unlike many Chinese AI companies that rely heavily on access to advanced hardware, DeepSeek has focused on software resource optimization," explains Marina Zhang, an associate professor at Sydney University who studies Chinese innovations. "DeepSeek has accepted open-source methods, aggregating collective knowledge and promoting collaborative innovation. This approach not only reduces resource constraints but also accelerates the development of cutting-edge technologies, distinguishing DeepSeek from more isolated competitors.

The US Technology Market Plummets

The Financial Times reported that American technology stocks have taken a hard hit.

The result caused a wave of surprise on the market Monday, with Nvidia at risk of losing over $300 billion in capital value, the largest drop recorded so far for any company, while investors have reassured future investment in AI hardware [...]

ASML, an European chip equipment producer, fell by 10%. Microsoft dropped by 6% and Meta underlined by 5%. Future stock prices suggest a 4.2% decline in the heavy Nasdaq technology index, while the S&P 500 is expected to fall by 2.4%.

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