China’s DeepSeek AI assistant becomes top free iPhone app as US tech stocks take a hit


Chinese AI assistant DeepSeek has become the top rated free app in Apple’s App Store in the US and elsewhere, beating out ChatGPT and other rivals. It is powered by the open-source DeepSeek V3 model, which reportedly requires less computing power than competitors and was developed for less than $6 million, according to (disputed) acquisition of the company. At the same time, it offers performance same as Claude-3.5, GPT-4o and other rivals, DeepSeek said last week.

The news that DeepSeek topped the App Store charts caused a sharp drop in tech stocks like NVIDIA and ASML this morning. Google’s parent company Alphabet and Microsoft also fell this morning. As the New York Times notesthe overall Nasdaq and S&P 500 also fell, and markets in Europe and Japan also took a small hit.

Available on web, app and API, DeepSeek is similar to AI Assistant like ChatGPT with features like coding content creation and research. The first release of DeepSeek-R1 is available under the MIT license, so it can be used commercially and without restrictions.

The company is located in Hangzhou, China and was founded in 2023 by Liang Wenfeng, who also launched the hedge fund behind DeepSeek. To improve the technology, he reportedly kept NVIDIA A100 chips before the US exports and matched those with less powerful chips that can still be imported, according to MIT Technology Review.

However, DeepSeek is still at a significant hardware disadvantage next to rival models from OpenAI, Google and others. That forced the company to be more efficient with its AI models, and it was supposedly able to build and train them at a lower cost than previously thought possible.

Analysts from Citi and others have questioned those claimshowever, and pointed out that China is a “stricter environment” for AI development than the US. However, the rise of DeepSeek has raised concerns about the potential profits of rivals such as OpenAI that have already invested billions in AI infrastructure.

All the attention right now around DeepSeek seems to have attracted some bad actors, though. According to CNBCDeepSeek says it has temporarily limited registrations for the service due to “massive malicious attacks.” Existing users should be able to log in as usual, however. But if all the buzz around the tool makes you want to check it out, you’ll have to be patient.

Update, January 27 2025, 11:47AM AND: This story has been updated with details of the DeepSeek cyber-attack with limited registration for the service.

Update, January 27 2025, 11:27AM AND: This story and its headline have been updated with more details on the stock price drop that seems to have hit this morning along with news around DeepSeek.

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