The Significance of Deepseek
A case study breaking down the drama behind Deepseek and what it means for the future of AI
For this month’s AI case study, we are diving into one of the trendiest topics of the year so far: Deepseek and what it means for the AI industry.
What is Deepseek?
DeepSeek is a Chinese artificial intelligence (AI) startup that has recently made headlines by releasing an AI assistant app, DeepSeek-V3, which has garnered significant attention for its performance and cost-effectiveness. The app quickly became the top-rated free app on the iOS App Store in the United States, surpassing established AI models like ChatGPT.
The emergence of DeepSeek has caused significant disruption in the AI industry, leading to a sharp decline in the stock market. On January 27, 2025, the release of DeepSeek's AI assistant triggered a global sell-off in technology stocks. Nvidia's stock, for example, fell by as much as 17–18%, and other tech firms, including Microsoft, Alphabet, and ASML, also experienced notable declines. This market turmoil resulted in a loss of approximately $593 billion in the market capitalizations of AI and computer hardware companies.
Why is Deepseek freaking US investors out?
What sets DeepSeek apart is its ability to develop competitive AI models at a fraction of the cost of its American counterparts. For instance, while leading AI companies may require thousands of GPUs and substantial financial investments to train their models, DeepSeek reportedly trained its latest model using approximately 2,000 Nvidia H800 GPUs over 55 days, at a cost of around $5.58 million.
The primary concern among investors is that DeepSeek's ability to produce high-performing AI models at a lower cost could disrupt the competitive landscape, potentially challenging the dominance of established American AI companies.
Key Differences Between Deepseek and ChatGPT
Purpose: ChatGPT is built for conversational AI and natural language generation, while Deepseek is focused on improving search and information retrieval
Primary Use: ChatGPT is used in chatbots, content generation, and virtual assistance. Deepseek is used in search engines, knowledge retrieval, and systems requiring intelligent information discovery
Technology: Both rely on deep learning, but ChatGPT focuses on language modeling, and Deepseek is more concerned with search optimization through semantic understanding
Tiffany’s Take
Here’s what is so special about Deepseek: It has the potential to transform the way we retrieve and interact with information.
Improved Search Efficiency: By understanding the meaning behind queries (semantic search), Deepseek can provide results that are more aligned with user intent, making search engines more intuitive and efficient.
Personalization: Deepseek’s ability to provide more personalized and context-aware search results is a key advantage in creating better user experiences, particularly in content-heavy domains like e-commerce, research, and knowledge management.
Enhanced Knowledge Retrieval: For industries like healthcare, legal research, and scientific discovery, Deepseek can help retrieve highly relevant information from vast datasets, making it a valuable tool for professionals who need precise and insightful results.
Competitive Advantage in Search: As traditional search engines like Google rely on keyword-based algorithms, Deepseek offers a more intelligent alternative by focusing on understanding queries in context, which can set it apart in specialized search markets.
Want to try it out for yourself? Play around with Deepseek to decide if this is the new gamechanger in the next battle for AI dominance.