Even as DeepSeek has wiped out nearly $500 billion from NVIDIA’s market cap in a manic Monday which saw the Chinese AI company become the number 1 app in the US, the drama isn’t quite over.
DeepSeek has stopped new sign ups to its viral app. It said that it was facing “malicious attacks”, and said new users would need a Chinese phone number to sign up. This effectively stops all US sign ups for the AI app.
“DeepSeek’s online services have recently faced large-scale malicious attacks. To ensure continued service, registration is temporarily limited to +86 phone numbers. Existing users can log in as usual. Thanks for your understanding and support,” a message on DeepSeek’s website said.
DeepSeek went viral over the last couple of days because people felt that it was delivering better answers — and at a cheaper price point — than ChatGPT. DeepSeek’s R1 model had demonstrated results very similar to OpenAI’s o1 model, which is the most sophisticated model that OpenAI currently makes available to users. More impressively, DeepSeek’s API is priced at nearly 90 percent below the rates OpenAI charges, which could make it an attractive alternative to OpenAI for developers who’re integrating AI APIs into their products. Even more impressively, DeepSeek’s model reportedly cost only $6 million to train instead of the billions that OpenAI spent on training its models, and was trained on inferior chips compared to the state-of-the-art NVIDIA chips that OpenAI was using.
DeepSeek’s viral moment has caused tremors in the tech world. NVIDIA’s stock is has fallen 16 percent, and wiped out over $500 billion of value, which is the biggest fall ever for a single company in the US. DeepSeek showed that it wasn’t important to have access to millions of its chips to build powerful AI models, and caused NVIDIA’s stock to plummet. OpenAI has meanwhile scrambled and begun offering its latest model o3-mini model to its free tier users. There have been reports that there is consternation internally at Meta, which had purchased billions of dollars of GPUs, and seems to have been handily beaten by a Chinese model at a fraction of the cost. And with DeepSeek shutting new sign ups to all non-Chinese users after “large-scale malicious attacks”, it appears that the drama around DeepSeek seems to be just getting started.