DeepSeek: Trump warns of ‘wake-up call’ for US tech firms

DeepSeek is powered by the open source DeepSeek-V3 model, which its researchers claim was trained for around $6m (£4.2m) – significantly less than the billions spent by rivals. But this claim has been disputed by others in AI.

Its emergence comes as the US is restricting the sale of the advanced chip technology that powers AI to China.

To continue their work without steady supplies of imported advanced chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.

This has resulted in AI models that require far less computing power than before.

It also means that they cost a lot less than previously thought possible, which has the potential to upend the industry.

“DeepSeek’s ability to rival US models despite limited access to advanced hardware demonstrates that software ingenuity and data efficiency can compensate for hardware constraints,” says Marina Zhang, an associate professor at the University of Technology Sydney, who focuses on China’s high-tech industries, told the BBC.

After DeepSeek-R1 was launched earlier this month, the company boasted of “performance on par with” one of OpenAI’s latest models when used for tasks such as maths, coding and natural language reasoning.

DeepSeek’s technology has been praised by high profile figures including OpenAI chief Sam Altman who called it “an impressive model, particularly around what they’re able to deliver for the price”, though he added that OpenAI would “obviously deliver much better models” moving forward.

The Chinese company claims its model can be trained on 2,000 specialised chips compared to an estimated 16,000 for leading models.

But not everyone is convinced. Some have cast doubt on some of DeepSeek’s claims, including tech mogul Elon Musk.

He responded to a post which claimed that DeepSeek actually has around 50,000 Nvidia chips that have now been banned from expert to China, saying: “Obviously.”