Why is the AI world freaking out over China's DeepSeek?

China's DeepSeek carries far-reaching implications for the global tech industry and supply chain. | BLOOMBERG

by SARITHA RAI AND NEWLEY PURNELL
January 27, 2025

DeepSeek, an AI startup just over a year old, has stirred awe and consternation in Silicon Valley with its breakthrough artificial intelligence model that offers comparable performance to the world’s best chatbots at seemingly a fraction of the cost.

Created in China’s Hangzhou, DeepSeek carries far-reaching implications for the global tech industry and supply chain, offering a counterpoint to the widespread belief that the future of AI will require ever-increasing amounts of power and energy to develop.

What exactly is DeepSeek?