DeepSeek releases new AI model with reduced costs, intensifying US-China rivalry
via Punch Nigeria3 min read
Chinese startup DeepSeek has released a new Artificial Intelligence model, claiming "drastically reduced" costs. This follows their 2025 R1 reasoning model, which matched US rivals' capabilities and was developed at a fraction of the cost. Founded by Liang Wenfeng in Hangzhou, DeepSeek began as a side project of his hedge fund in 2023. The company's R1 model, released in January 2025, led to a US tech share sell-off and was described by venture capitalist Marc Andreessen as a "Sputnik moment." DeepSeek's AI tools, like other Chinese chatbots, avoid topics censored in China, leading to bans or restrictions on government devices in several countries, including the United States, Australia, and South Korea. Despite this, its low cost and ease of deployment have made it popular in developing countries, holding four percent of the global chatbot market share, compared to ChatGPT's 68 percent. DeepSeek's systems are open-source, a strategy also adopted by other major Chinese AI players like Alibaba, in contrast to the closed models of Western rivals. The success of DeepSeek has boosted China's AI sector, with other Chinese AI startups like Zhipu AI and MiniMax seeing strong market debuts. However, DeepSeek's rise has faced controversy, with reports suggesting the company may have circumvented a US ban on exporting high-end chips to China to train its new V4 model. DeepSeek did not respond to requests for comment on these allegations, and NVIDIA stated they had not seen evidence of
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