DeepSeek AI – What is it, and How it Dethroned Nvidia and OpenAI in The AI Race

ChatGPT struck the market a few years ago with its cutting-edge technology and artificial intelligence developments. Today, another company is taking over the AI industry with its advanced models that provide comparable performance at a fraction of the investment.

DeepSeek AI entered the generative AI market right after Donald Trump invested $500 billion into the Stargate project to improve the US artificial intelligence infrastructure.

The company presented three paramount technologies that cover multiple corporate and individual needs, raising the competition bar and promising a tough rivalry in AI in 2025.

What is DeepSeek AI?

DeepSeek AI is a groundbreaking Chinese artificial intelligence company founded in 2023. It has quickly become a leading player in the AI industry, known for developing powerful models like DeepSeek-R1 and DeepSeek-V3.

These models challenge established AI giants like OpenAI by offering advanced capabilities, including natural language processing, coding, and complex reasoning tasks.

DeepSeek differentiates itself with a focus on open-source solutions, making its models available to developers and businesses worldwide.

It turned heads due to its low-cost development compared to the astronomical amounts spent on US AI models, including ChatGPT, Llama, Gemini, and Anthropic. DeepSeek reportedly cost $6 million to develop, compared to the $1 trillion invested by blue-chip tech firms.

DeepSeek AI Models

DeepSeek has developed three major AI models designed to excel in different areas and provide reliable task automation. Let’s review them:

• DeepSeek-R1: Released in January 2025, DeepSeek-R1 is an AI assistant that can perform multiple tasks, like complex reasoning and coding. It is open-source, making it highly accessible to developers and businesses, rivaling OpenAI’s ChatGPT.
• DeepSeek-V3: Launched in December 2024, DeepSeek-V3 utilizes inference speed and resource efficiency to perform tasks that need significant computational power and large-scale data processing. It is a strong rival to Meta’s Llama AI model.
• DeepSeek Coder: A series of open-source AI models that assist with coding tasks. They are capable of understanding and generating code across multiple programming languages, offering from 1.3 to 33 billion parameters, making it a strong competitor to Google DeepMind AlphaCode.

DeepSeek vs OpenAI

DeepSeek AI has quickly emerged as a competitor to OpenAI in developing language models and AI assistants.

While OpenAI’s models like GPT-4 are renowned for their versatility and advanced capabilities, DeepSeek differentiates itself by offering open-source solutions that prioritize efficiency and cost-effectiveness.

The company’s models, such as DeepSeek Coder, R1, and V3, excel at complex tasks like mathematical problem-solving, reasoning, and coding, challenging OpenAI’s dominance in these areas.

DeepSeek Impact on AI Stocks

DeepSeek caused a massive market boom, gaining huge media and investor attention starting on 27 January. This immediately affected the entire stock market.

As a result, US AI players and traders have started to reassess their positions in companies like OpenAI, Nvidia, and Broadcom, leading to massive fluctuations in AI stock prices. Some investors shifted their focus toward DeepSeek’s potential for disrupting the market.

Nvidia

Nvidia is a global leader in graphics processing units used for training and deploying advanced AI models. DeepSeek relies heavily on powerful hardware like those produced by Nvidia. However, major market sell-offs affected shares, causing it to lose 20% of its stock price in two days, including a $10 loss in intra-day trading on 27 January.

AMSL

A fast-growing AI hardware and software company specializing in high-performance chips that support developing and deploying AI models like DeepSeek. While AMSL’s innovative approach helps drive the next wave of AI advancements, major market shifts affected its stock valuation, causing it to slip by 12%, losing around $100 in two days.

Broadcom Inc

A multinational tech company that develops a wide range of semiconductor solutions. Broadcom’s chips are integral to the infrastructure needed to power large-scale AI systems that focus on scalability and performance. However, its shares deteriorated starting on 27 January, dropping 20% of its value in two days from $244 to $195.

Final Takeaways

DeepSeek AI is rapidly establishing itself in the artificial intelligence landscape with powerful models that challenge leading US tech firms.

With models that directly compete with OpenAI’s ChatGPT, Meta’s Llama, and Google’s Gemini, DeepSeek is a major disruptor in the AI sector.

By focusing on open-source technology and efficiency, DeepSeek is democratizing cost-effective access to advanced AI capabilities, offering businesses and developers reliable alternatives to proprietary models. Ultimately changing the industry’s perspective to striking development costs.