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LAST UPDATE | 28 Jan
CHINESE FIRM DEEPSEEK’S artificial intelligence chatbot has soared to the top of the Apple Store’s and Google Play’s download charts, displacing market leader ChatGPT.
It’s a move that has stunned industry insiders and analysts with its ability to match its US competitors.
The programme has shaken up the tech industry and hit US titans including Nvidia, the AI chip juggernaut, that saw nearly $600 billion of its market value erased, the most ever for one day on Wall Street.
Overall, more than $1 trillion was wiped off the value of US tech stocks.
DeepSeek was developed by a start-up based in the eastern Chinese city of Hangzhou, known for its high density of tech firms.
Available as an app or on desktop, DeepSeek can do many of the things that its Western competitors can do – write song lyrics, help work on a personal development plan, or even write a recipe for dinner based on what’s in the fridge.
It can communicate in multiple languages, though it is strongest in English and Chinese.
However, it is subject to many of the limitations seen in other Chinese-made chatbots – asked about leader Xi Jinping or Beijing’s policies in the western region of Xinjiang, it implored the user to “talk about something else”.
“I am an AI assistant designed to provide helpful and harmless responses,” it explained.
But from writing complex code to solving difficult sums, industry insiders have been astonished by just how well DeepSeek’s abilities match the competition.
“What we’ve found is that DeepSeek… is the top performing, or roughly on par with the best American models,” Alexandr Wang, CEO of Scale AI, told CNBC.
That’s all the more surprising given what is known about how it was made.
In a paper detailing its development, the firm said the model was trained using only a fraction of the chips used by its Western competitors.
Analysts had long thought that the United States’ critical advantage over China when it comes to producing high-powered chips – and its ability to prevent the Asian power from accessing the technology – would give it the edge in the AI race.
But DeepSeek researchers said they spent only $5.6 million (€5.4m) developing the latest iteration of their model – peanuts when compared with the billions US tech giants have poured into AI, primarily on expensive Nvidia chips and software.
The development is significant given the AI boom, ignited by ChatGPT’s release in late 2022, which propelled Nvidia to become one of the world’s most valuable companies.
Just published: front page of the Financial Times, UK edition, Tuesday 29 January https://t.co/ZYXv0Gvxl4 pic.twitter.com/cOdcUSnDXQ
— Financial Times (@FT) January 27, 2025
But shares in major tech firms in the United States and Japan tumbled as the industry takes stock of the challenge from DeepSeek.
Chip making giant Nvidia – the world’s dominant supplier of AI hardware and software – closed down 17% on Wall Street yesterday.
And Japanese firm SoftBank, a key investor in US President Donald Trump’s announcement of a new $500 billion venture to build infrastructure for artificial intelligence in the United States, fell almost 6% after dropping 8.3% yesterday.
Venture capitalist Marc Andreessen, a close advisor to Trump, described it as “AI’s Sputnik moment” – a reference to the Soviet satellite launch that sparked the Cold War space race.
“DeepSeek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen,” he wrote on X.
US President Donald Trump said DeepSeek was a “wake up call” for US firms, after its emergence caused a rout in tech shares.
“Hopefully, the release of DeepSeek AI from a Chinese company should be a wake up call for our industries that we need to be laser-focused on competing to win,” Trump told a Republican congressional retreat in Miami yesterday.
But Trump said the shock could also be “positive” for Silicon Valley by forcing it to innovate more cheaply.
“I would say that could be a positive,” Trump said. “So instead of spending billions and billions, you’ll spend less, and you’ll come up with hopefully the same solution.”
Like its Western competitors Chat-GPT and Meta’s Llama, DeepSeek uses a large-language model (LLM) – massive quantities of texts to train its everyday language use.
But unlike Silicon Valley rivals, which have developed proprietary LLMs, DeepSeek is open source, meaning anyone can access the app’s code, see how it works and modify it themselves.
“We are living in a timeline where a non-US company is keeping the original mission of OpenAI alive – truly open, frontier research that empowers all,” Jim Fan, a senior research manager at Nvidia, wrote on X.
OpenAI is behind Chat-GPT and its chief executive Sam Altman has praised the recent debut of DeepSeek’s AI model, saying it was “invigorating to have a new competitor.”
deepseek's r1 is an impressive model, particularly around what they're able to deliver for the price.
— Sam Altman (@sama) January 28, 2025
we will obviously deliver much better models and also it's legit invigorating to have a new competitor! we will pull up some releases.
In a social media post, Altman called DeepSeek’s R1 “an impressive model, particularly around what they’re able to deliver for the price.”
DeepSeek said it “tops the leaderboard among open-source models” – and “rivals the most advanced closed-source models globally”.
Beijing’s leadership has vowed to be the world leader in AI technology by 2030 and is projected to spend tens of billions in support for the industry over the next few years.
And the success of DeepSeek suggests that Chinese firms may have begun leaping the hurdles placed in their way.
Last week DeepSeek’s founder, hedge fund manager Liang Wenfeng, sat alongside other entrepreneurs at a symposium with Chinese Premier Li Qiang – highlighting the firm’s rapid rise.
Fianna Fáil TD Malcolm Byrne has said Irish citizens and businesses “need to be careful if they decide to use Deepseek”.
He voiced concerns that any data shared with the app will be stored on servers based in China.
“If our data is stored in Ireland or other parts of the European Union, there are strong safeguards in place as to how that data will be used,” said Byrne.
“If data is stored in China, those safeguards does not exist.
“The Chinese Communist Party can use its National Security Law to access this data.
“Deepseek’s privacy policy provides that any personal information gathered through using its product may be stored on servers based in China.”
Byrne added that “the potential for misuse of the technology and of data collected is huge”.
He said it’s important for the Government to have a clear strategy on AI use and called for a special Oireachtas Committee on AI and for a programme of education on AI and Technology to be rolled out across the public service, as well as for TDs and Senators.
Meanwhile, Australia’s science minister Ed Husic aised privacy concerns over DeepSeek, urging users to think carefully before downloading it.
“There are a lot of questions that will need to be answered in time on quality, consumer preferences, data and privacy management,” Husic told national broadcaster ABC.
“I would be very careful about that. These type of issues need to be weighed up carefully.”
Husic said Chinese companies sometimes differed from Western rivals when it came to user privacy and data management.
“The Chinese are very good at developing products that work very well. That market is accustomed to their approaches on data and privacy.
“The minute you export it to markets where consumers have different expectations around privacy and data management, the questions is whether those products will be embraced in the same way.
“I think you have to be careful, I’m just being completely frank and direct on that.”
Australia in 2018 banned Chinese telecommunications giant Huawei from its national 5G network, citing national security concerns.
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Sold out once again by the unions. Trying to cast your vote was like trying to get a seat on the Titanic.
@Martin Forde: pull your subs and stop whinging. Or why don’t you get involved with your union and organise for better results. You obviously have all the answers.
@Martin Forde: rubbish.. If u didn’t vote. It’s you’re own fault.
@Martin Forde: I cast my vote with no difficulty whatsoever
@Martin Forde: I was able to vote online no problem. It took less than a minute.
@Martin Forde:
Ye should have pushed a few oul wans an kids overboard.
@Martin Forde: I voted against, it was incredibly easy to cast my vote, I got numerous reminders and explainers on how to do so
@Martin Forde: why would you want a seat on the Titanic? The lifeboat would be a better choice
Will be enough to cover the price of leaving the light while using the toilet over Winter..well done
@Clevie Sal: It’s outrageous, they should have given you a 100% increase, a medical card and rent allowance. They probably should have given you a 3 bed social house too since Christmas is coming up, and maybe a penguin bar as icing on the cake. You would still find a way to complain. Probably give out that you didn’t get the full pack of penguin bars
@Tom Jacob: you must be new here Tom?! Welcome to the Journal my man!
@Tom Jacob: no Tom. Only those that don’t want jobs are entitled to all that. The rest of us must continue to work hard to pay for the poor cret ins.
Correctional addition; ‘that’s a massive pay decrease (relative to inflation)’. In real terms, its a large pay cut in a time when the government has a budget surplus. If we were in the middle of a massive recession I’d be less sympathetic.
@Jim Smith: Yeah it doesn’t look like the Irish economy is in a very good state of this is all they can ‘afford’ for the public sector. Or maybe the Irish government don’t even care for their workers who are critical to the functioning of the state, NeverMind regular citizens.
@Jim Smith: Unfortunate thing is that for most of the employees the govt takes the half if not more back in taxes…… With regard to buying power and covering rising costs its a further hit because of the tax take. For example if inflation goes up by 10% and wages rise by 10%. Gross salary might be 10% higher but net salary is less than 10% higher than the net salary was before the increase. So buying power is reduced further. Salaries need to out pace inflation for buying power to remain the same
@Paul Hedderman: Given the present world economic crisis, expecting salaries to outpace inflation is fantasy. It would be more akin to reality if the Govt and Unions addressed the inefficiencies in the public sector before pumping millions into it, including pay rises not attached to properly implemented productivity agreements
@Barrycelona: Up until this year, salaries have been outpacing inflation for quite a while
@Barrycelona: Did I say anything along the lines of expecting it?!?!…… Just making the point that even if salaries rise on par with inflation, buying power still reduces. Making people aware of the fact which many don’t know…… I’m well aware of the current climate!
@Paul Hedderman: Very true but taxation always seems to be a separate argument. Part of the voter base also thinks that someone anything over 37k a year is part of some upper class. USC is just a convoluted mess but I’ve seen a poll where the options were ‘reduce taxes’ or ‘increase spending’. The vast majority choose ‘increase spending’. One unscientific news paper poll but I don’t doubt that it represents the mood of the majority. We as a country seem to want higher taxation (once it’s somewhat stealthy) and then we fight and beg for funds. In theory, would a couple with kids rather pay 1000 less in taxes or get an 600 euro child care benefit and a free tooth cleaning? I’d bet the latter sadly.
With inflation at 8% this year alone, that’s a massive pay decrease. It could be up to a 10% pay cut across the board if a slowdown or recession doesn’t hit. Harsh on them.
@Jim Smith: it is not a pay decrease, it is completely false/exaggerated to say so. Will it cover all rising costs, no it won’t, but will wages be higher, yes they will so they will help towards rising costs. Will most private sector employees see a 6.5% pay rise in the next 12 months? Like hell they will. I’ll take my 6.5% and be glad and grateful of that bit extra in the full knowledge that I’m lucky to be getting anything extra
@Jo H: It is a pay increase in nominal terms but a pay decrease in real terms. If you don’t know or don’t understand what this means, then you are a precise example of something called the “money illusion”.
@Kevin Collins: it’s more money in their pay cheque tomorrow than today. Their employer is giving them more money. It’s an increase.
@Kevin Collins: I don’t need a lesson, or to have it implied that I don’t understand thanks. I fully get the concept, but it doesn’t alter the fact that there will be more money in my wages next week than last, and that is a pay rise.
@Jo H: you clearly do not understand the concept. You have just agreed to a pay cut not a payrise. Yes your wages have nominally increased but they will buy you fewer things. Your money is now worth less and thus it is a pay cut. Nominal increase minus inflation = real decrease. To argue otherwise is to demonstrate a fundamental misunderstanding of what money is.
@Jo H: In nominal terms = pay increase.
In real terms, your pay in the public sector has been decreasing year-on-year. Therefore it is a salary that has been changed to something in real terms that is less 5 years ago. Also known as a decrease.
A standard public servant would be better off 5 years ago on their salary then than on this ‘increase’ today. Period.
@Kevin Collins: I do understand. However, I believe that more money in my wages to go toward the rising cost of living is better than not getting an increase in my wages towards it. I don’t think it would have been possible to get a better pay deal and I’m glad to have gotten something versus nothing. A pay rise to out pace the cost of inflation simply will not happen.
@Kevin Collins: if there was no opportunity to get an increase by way of negotiations they would have the same pay tomorrow as they do today. What would you call this?
Instead they have had an opportunity and agreed 6.5%. This is more money. It is not a negotiated decrease, or an agreement to a pay cut. They’ve lessened the gap between their income and inflation. It’s not closed, but it’s improved , the gap is shrunk. They are better off.
When there was deflation after the financial crash no one was going around saying they got a pay increase, just like now they don’t say 6.5% more is a decrease.
@Jo H: Of course, we all need extra money but this idea of seeking wage rises that mirror the level of inflation is self-defeatist. Funding a 6.5% pay increase across the public sector has the effect of further reducing already depleted services. Given the mega complaints by the public sector about working conditions or essential personnel not being able to afford accommodation in Dublin or the need for more teachers or nurses, go out the window and clearly show how disingenuous their unions are about creating better working conditions or properly working public services for the rest of us. They refuse to acknowledge their shortcomings which makes it nearly impossible to attach properly implemented productivity agreements to pay rises. If they were more efficient, they could be getting proper pay rises by getting themselves onto a higher pay grade, while the unions create better working conditions or more Govt funding. Given the size of the public service in this country, they are doing themselves the most damage. They are not owed a living by society but need to improve the lot of society.
@Barrycelona: I wasn’t suggesting it should have been more. I was pointing out to other commenters that to say it it a pay decrease is a falsehood, that just because it wasn’t as high as they would have liked or wanted doesn’t make it so. I actually agree with you that increases at a level matching inflation shouldn’t be sought, and furthermore don’t think they would have been successful even if they had
@Paolo Fandango: Exactly!
@Jim Smith: Yes but when the slowdown or recession does hit their jobs will be safe and they’ll have greater purchasing power.
@Jim Smith: public sector are actually getting a 6.6 percent increase. Plus the 1% already due in October , which makes it 7.7% increase from now until next October. The figure in the article above is wrong as 1.01* 1.03*1.02*1.0175 , means a 7.7 % increase. Also factor in 600 energy credits and increase of take home pay due to tax cuts ,especially, if you are getting over 40,000 gross.
However this won’t cover next years inflation.
@Kevin Thompson: That’s over 2 years so you’d have to double your inflation numbers to compare
@Jo H: It’s not an exaggeration. I’m in the private sector. I go to my paymasters if inflation is rampant and tell them to pay me the new going rate. If they don’t I leave the project and they have to hire my replacement from the market at the higher rate. This is happening in the public sector when staff leave for the private sector. I know because I do contract work for a very large semi private body. Having a skilled and trained worker leave and then be replaced by a higher paid worker from the job market actually costs more for the business/tax payer. It creates more inefficiencies rather than solve them. The semi private body that I currently do contract work for is bleeding staff due to the pay and is hiring contractors at a higher market rate to replace them. It pains me as a tax payer.
@Jim Smith: I’m glad you work in an area that allows you to have that sort of leverage, but the vast majority of workers, particularly private sector do not. I only left the private sector 5 years ago and let me tell you, if I looked for a pay increase to match inflation or I was leaving, I’d have been told not to let the door hit me on the way out! You can’t really believe the average office or retail worker has that sort of power?
Seems reasonable. If you add in what everyone is getting in terms of energy credits (not taxed), plus adjustments to the tax bands in the budget, it’s actually closer to parity with inflation, though not quite there. At least it provides a bit of certainty and allows better financial planning for the next while. There’s also the fact of it being backdates to February, meaning above bit of extra cash for the winter. I don’t really see that there’s room for much of any more to add to this, there is definitely a need to keep a bit of tax revenue in reserve for next year. Could have been a lot worse.
@Michael Garvey: Energy credits are temporary ie once off as far as we know. Gas and bills in general being a lot more expensive seems permanent due to government policies. If living with a working member of the opposite sex, dole is 9 months before you are cut off. The government is creating uncertainty. Perhaps spending a billion a year on fighting Russia was a bad idea with our current hospital and housing crises. 47m to give free school books to children. A billion to fight Russia. It doesn’t add up.
@Jo H: Of course, we all need extra money but this idea of seeking wage rises that mirror the level of inflation is self-defeatist. Funding a 6.5% pay increase across the public sector has the effect of further reducing already depleted services. Given the mega complaints by the public sector about working conditions or essential personnel not being able to afford accommodation in Dublin or the need for more teachers or nurses, go out the window and clearly show how disingenuous their unions are about creating better working conditions or properly working public services for the rest of us. They refuse to acknowledge their shortcomings which makes it nearly impossible to attach properly implemented productivity agreements to pay rises. If they were more efficient, they could be getting proper pay rises by getting themselves onto a higher pay grade, while the unions create better working conditions or more Govt funding. Given the size of the public service in this country, they are doing themselves the most damage. They are not owed a living by society but need to improve the lot of society.
@Barrycelona: I think you might find no increases would lead to a lot of the talent leaving meaning more dead wood and more poor productivity.
I was a siptu member and I found out that siptu give a donation to the workers party out of every members union fees , but u can write to siptu and ask them not to give them anything from your own payment, that’s a fact you can contact them and ask yourself if you don’t believe me
6.5%. Roughly the same percentage increase as the pensioners and disabled.
I got an extra rise .
Left the union and now have my subs to spend on rent.
Public sector greed again while poor low income families are struggling to pay their bills. This out of touch brigade, are looking for more money. While, a staunch supporter of the union movement in general . Public sector unions are a disgrace and so out of touch with the real world .
have your say