DeepSeek, the eponymous AI assistant app from a Chinese start-up, rocketed to the top of Apple’s iPhone download charts, stirring doubts in Silicon Valley about the strength of America’s lead in artificial intelligence.

The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms’ latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain.

Chinese tech firms linked to DeepSeek, such as Iflytek, surged on Monday, while chip-making tool makers like Advantest slumped on the potential threat to demand for Nvidia’s AI accelerators. US stock index futures also tumbled amid concerns that DeepSeek’s AI models may disrupt US technological leadership.

Lauded by investor Marc Andreessen as “one of the most amazing and impressive breakthroughs”, DeepSeek’s assistant shows its work and reasoning as it addresses a user’s written query or prompt. Reviews on Apple’s App Store and on Google’s Android Play store praised that transparency. The app topped the free downloads chart on iPhones in the US and is among the most downloaded productivity apps in the Play store.

Founded by quant fund chief Liang Wenfeng, DeepSeek’s open-sourced AI model is spurring a rethink of the billions of dollars that companies have been spending to stay ahead in the AI race.

Its initial success provides a counterpoint to expectations that the most advanced AI will require increasing amounts of computing power and energy — an assumption that has driven shares in Nvidia and its suppliers to all-time highs.

Small and efficient

The exact cost of development and energy consumption of DeepSeek are not fully documented, but the start-up has presented figures that suggest its cost was only a fraction of OpenAI’s latest models. That a small and efficient AI model emerged from China, which has been subject to escalating US trade sanctions on advanced Nvidia chips, is also challenging the effectiveness of such measures.

Read: Is Broadcom the next Nvidia?

“The US is great at research and innovation and especially breakthrough, but China is better at engineering,” computer scientist Kai-Fu Lee said earlier this month at the Asian Financial Forum in Hong Kong. “In this day and age, when you have limited compute power and money, you learn how to build things very efficiently.” — Vlad Savov and Newley Purnell, with Robert Lea and Jasmine Lyu, (c) 2025 Bloomberg LP

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