What’s DeepSeek, China’s AI startup sending shockwaves through global tech?

With the release of an artificial intelligence (AI) model that rivals the capabilities of Google and OpenAI, DeepSeek, a little-known Chinese startup, has shocked the world’s tech industry.

DeepSeek-R1’s creator says its model was developed using less advanced, and fewer, computer chips than those employed by tech giants in the United States.

The model’s development team claimed to have spent less than $6 million on computing power to train the model, a fraction of the multibillion-dollar AI budgets enjoyed by US tech giants like OpenAI, Alphabet, and Meta, in a research paper released last week.

Marc Andreessen, one of the most influential tech venture capitalists in Silicon Valley, hailed the release of the model as “AI’s Sputnik moment”.

The recent emergence of a small Chinese startup capable of outperforming Silicon Valley’s top players has questioned assumptions about US supremacy in AI and raised concerns that the sky-high market valuations of companies like Nvidia, Alphabet, and Meta may be untrue.

On Monday, Nvidia, which holds a near-monopoly on producing the semiconductors that power generative AI, lost nearly $600bn in market capitalisation after its shares plummeted 17 percent.

US President Donald Trump, who last week announced the launch of a $500bn AI initiative led by OpenAI, Texas-based Oracle and Japan’s SoftBank, said DeepSeek should serve as a “wake-up call” on the need for US industry to be “laser-focused on competing to win”.

What is DeepSeek?

DeepSeek, which is based in Hangzhou, was founded in late 2023 by Liang Wenfeng, a serial entrepreneur who also runs the hedge fund High-Flyer.

Although little known outside of China, Liang has a long history of combining investing with cutting-edge technology.

In 2013, he co-founded Hangzhou Jacobi Investment Management, an investment firm that employed AI to implement trading strategies, along with a co-alumnus of Zhejiang University, according to Chinese media outlet Sina Finance.

In 2015 and 2016, Liang established two additional companies with a focus on computer-directed investing, Hangzhou Huanfang Technology Co. and Ningbo Huanfang Quantitative Investment Management Partnership, respectively.

In an interview with the Chinese media outlet Waves in 2023, Liang refuted the claim that startups should be too late to start using AI or that it was too expensive.

“Reproduction alone is relatively cheap — based on public papers and open-source code, minimal times of training, or even fine-tuning, suffices. Research, however, involves extensive experiments, comparisons, and higher computational and talent demands”, Liang said, according to a translation of his comments published by the ChinaTalk Substack.

Liang claimed that curiosity was the main factor in his interest in AI.

“From a broader perspective, we want to validate certain hypotheses. For example, we hypothesise that the essence of human intelligence might be language, and human thought could essentially be a linguistic process”, he said, according to the transcript.

What you perceive as “thinking” might actually be your brain-waving language. This suggests that large language models with AGI-like capabilities could develop, he added, referring to artificial general intelligence (AGI), a branch of artificial intelligence that attempts to imitate the cognitive abilities of people.

A comment request was not immediately responded to by DeepSeek.

On Monday, Gregory Zuckerman, a journalist with The Wall Street Journal, said he had learned that Liang, who he had not heard of previously, wrote the preface for the Chinese edition of a book he authored about the late American hedge fund manager Jim Simons.

In a column describing Liang’s book as a tome that “unravels many previously unresolved mysteries and brings us a wealth of experiences to learn from,” Zuckerman wrote, “Simons left a deep impact, apparently.”

“Even my mother didn’t get that much out of the book”, Zuckerman wrote.

Why has DeepSeek completely transformed the tech industry?

Simply put, Silicon Valley and the US government’s approach to AI have been questioned by the success of the company.

Due to their size, which allows them to attract the best talent from all over the world and invest colossal amounts in building data centers and purchasing large quantities of expensive high-end chips, are widely believed to have a significant edge in AI.

The arrival of DeepSeek has challenged the notion that a billion-dollar AI startup must be in the top echelon.

“OpenAI was founded 10 years ago, has 4, 500 employees, and has raised $6.6 billion in capital. DeepSeek was founded less than 2 years ago, has 200 employees, and was developed for less than $10 million”, Adam Kobeissi, the founder of market analysis newsletter The Kobeissi Letter, said on X on Monday.

“How are these two companies now competitors”?

In their research paper, DeepSeek’s engineers said they had used about 2, 000 Nvidia H800 chips, which are less advanced than the most cutting-edge chips, to train its model.

The team claimed to have used a number of highly sophisticated models to combine to make slower chips’ data analyses more effective.

For the US government, DeepSeek’s arrival on the scene has raised questions about its strategy of trying to contain China’s AI advances by restricting exports of high-end chips.

According to the research paper from DeepSeek, either the most sophisticated chips are required to produce high-performing AI models or Chinese companies can still obtain the chips in sufficient quantities, or a combination of both.

California-based Nvidia’s H800 chips, which were designed to comply with US export controls, were freely exported to China until October 2023, when the administration of then-President Joe Biden added them to its list of restricted items.

In his 2023 interview with Waves, Liang said his company had stockpiled 10, 000 Nvidia A100 GPUs before they were banned for export. Graphic processing units, or graphics processing units, are electronic circuits that are used to speed up computer graphics and image processing.

Given the success of various AI models being developed by Chinese companies like Alibaba and Baichuan, Tanishq Abraham, a former research director at Stability AI, said he was not surprised by China’s level of AI advancement.

China has been able to innovate and squeeze performance from whatever they have, Abraham said to Al Jazeera, “even though there have been restrictions on China’s ability to obtain GPUs.”

“I believe that US companies should learn that there is still a lot of performance they can squeeze out of.”

Tara Javidi, co-director of the Center for Machine Intelligence, Computing and Security at the University of California San Diego, said DeepSeek made her excited about the “rapid progress” taking place in AI development worldwide.

According to Javidi, “my only hope is that the attention given to this announcement will increase the level of intellectual interest in the subject, further increase the talent pool, and, last but not least, increase both private and public funding for AI research in the US,” Javidi said.

The New York Stock Exchange at the opening on January 27, 2025]Angela Weiss/AFP]

Meanwhile, investors ‘ confidence in the US tech scene has taken a hit – at least in the short term.

Apart from Nvidia’s dramatic slide, Google parent Alphabet and Microsoft on Monday saw their stock prices fall 4.03 percent and 2.14 percent, respectively, though Apple and Amazon finished higher.

“If DeepSeek’s cost numbers are real, then now pretty much any large organisation in any company can build on and host it”, Tim Miller, a professor specialising in AI at the University of Queensland, told Al Jazeera.

“So, in this sense, the game has changed completely because there is a new ‘ rule ‘ that anyone can play”.

Does this indicate that China is winning the AI race?

Not necessarily.

The field is moving quickly despite the consensus that ChatGPT and DeepSeek-R1 perform at comparable or even better levels for some tasks.

Sam Altman, the company’s CEO, announced earlier this month that the company would release its most recent reasoning AI model, the o3 mini, within weeks after taking user feedback into consideration.

On Monday, Altman acknowledged that DeepSeek-R1 was “impressive” while defending his company’s focus on greater computing power.

“We will undoubtedly deliver much better models,” and having a new rival is legit energizing! We will pull up some releases”, Altman said on X.

“But most of all, we are eager to carry out our research roadmap and think that more computation is needed now than ever to fulfill our mission.”

altman
OpenAI CEO Sam Altman appears during a news conference with US President Donald Trump at the White House, Washington, DC on January 21, 2025]Andrew Harnik/Getty Images via AFP]

Rui Ma, the founder of Tech Buzz China, claimed that the Chinese tech industry was shocked when OpenAI first released ChatGPT in 2022.

“Most entrepreneurs had completely missed the opportunity that generative AI represented, and felt very humbled”, Ma told Al Jazeera.

“It’s clear that they have been hard at work since. This past weekend, in my opinion, demonstrates how seriously they took the challenge of “catching up” with Silicon Valley. Washington should concentrate on boosting Silicon Valley rather than repressing China, in my opinion, to keep the US in the lead.

According to Abraham, the former research director at Stability AI, perceptions may also be influenced by the fact that companies like OpenAI haven’t made their most advanced models freely available to the general public, in contrast to DeepSeek.

The best model available for free use was made by DeepSeek. On the other hand, OpenAI’s best model is not free”, he said.

“So DeepSeek shocked most users who use ChatGPT for free and gives the impression that there are significantly more capabilities now than OpenAI, which has already had a similar-performing model paidwalled for a few months.” People are unable to fully understand the advancement and capabilities of AI due to this pay-walling of frontier AI models.

Miller, the University of Queensland professor, said DeepSeek’s advances and other recent developments suggest that China is at least “up there” with the US in AI.

Late last year, I made a somewhat rash prediction that the next scientific discovery in AI could be made by a small-scale researcher without much computing power, arguing that they would need to be smarter to compete.

Russia-Ukraine war: List of key events – day 1,069

Here is the situation on Tuesday, January 28:

Fighting

  • Russia’s Ministry of Defence said Moscow’s air defences destroyed 32 Ukrainian drones in an overnight attack. The ministry reported that the Voronezh region, which borders Ukraine, had caused nearly half as much destruction.
  • According to the Ukrainian Air Force, Kyiv’s forces downed 57 of 104 Russian drones in an overnight attack. 39 drones, according to the air force, were also lost. An apartment block, a fire at an industrial facility in western Ukraine, and other damage to infrastructure, according to reports from the attack barrage. No casualties were reported.
  • Russia said it took back control and “liberated” Nikolayevo-Darino, a small village in the Kursk region previously captured by Ukraine’s forces.
  • A deputy commander has been detained in Ukraine for allegedly stealing 24 night vision devices, which cost about $95,000, according to the State Bureau of Investigation.
Firefighters work at a site of a Russian drone strike, amid Russia’s attack on Ukraine, in the Kyiv region, Ukraine, on January 25, 2025]Handout/Press service of the State Emergency Service of Ukraine in Kyiv region via Reuters]
  • A woman who was found guilty of aiding Russia and supporting its invasion on social media was sentenced to 11 years in prison, according to the Prosecutor General of Ukraine. Another Russian national was allegedly eluded from Kharkiv after allegedly spying on the Ukrainian army.
  • According to the General Staff of the Ukrainian Armed Forces, the total combat losses of Russian forces in Ukraine since February 2022 have totaled 831,620 personnel, according to Qatar News Agency (QNA).
  • Russia sentenced a retired teacher to eight years in prison for making allegations of Russian atrocities, according to the Ukrainian-based OVD-Info rights group.
  • The mayor of Kharkiv, Ihor Terekhov, said an overnight Russian attack set a private business on fire. No immediate reports of potential casualties were made.

Humanitarian aid

  • Following the US’s decision to freeze foreign aid, the AFP news agency reported concern among Ukrainian humanitarian projects. According to sources from the US Agency for International Development’s (USAID) mission in Ukraine, the agency claimed that the majority of projects had been ordered to stop.

Politics and diplomacy

  • The EU’s designating foreign commissioner, Kaja Kallas, confirmed that the ministers had agreed to extend the sanctions against Russia into this year.
  • The EU intends to continue discussions with Ukraine regarding gas supply to Europe. According to Reuters news agency, Hungary and Slovakia will also be a part of these discussions.
  • The EU has offered $32m in emergency aid to buy gas for Transnistria, Moldova’s separatist enclave, after Russia cut off supplies. Ursula von der Leyen, the head of the European Commission, said the bloc could not accept that people on their continent lack access to the most basic amenities and that “hard times reveal true friends.”
  • Vladimir Putin, the president of Russia, and Donald Trump, the US president, have not yet contacted the Kremlin to arrange a meeting. Dmitry Peskov, a spokesman for the Kremlin, stated that Moscow believes Trump is still interested in holding a meeting with him. He previously stated that he wanted to meet Putin “immediately.”
  • The Moldovan ambassador in Moscow was summoned by Russia’s Foreign Ministry in response to “unfounded accusations” made by a political party representative of the country against the Russian ambassador in Chisinau.
  • Ukraine’s President Volodymyr Zelenskyy travelled to Poland to participate in the Auschwitz liberation’s 80th anniversary observances. He met with French President Emmanuel Macron and discussed Kyiv’s EU membership and security guarantees.

‘Five babies in incubator’: HRW on danger to pregnant women, babies in Gaza

According to Human Rights Watch (HRW), Israel’s 15-month war against Gaza, as well as the severe restrictions it placed on the flow of humanitarian aid, and Israeli forces’ attacks on health facilities and its targeting of healthcare workers, have created “life-threatening danger” for pregnant women and babies.

The group noted in the report released on Tuesday that despite the ongoing ceasefire, the precarious conditions in which Gaza’s women are giving birth are unlikely to improve because Israeli legislation that targets the UN Relief and Works Agency for Palestine Refugees (UNRWA) and effective this week is expected to severely restrict the flow of humanitarian aid to the devastated region.

Women in Gaza were sometimes rushed out of overcrowded hospitals within hours of giving birth to make room for war-torn patients. The al-Helal al-Emirati Maternity Hospital in Rafah, which has had the fewest incubators and most premature babies, has also had a significant impact on newborn care, with one doctor claiming that the hospital’s doctors had to place “four or five babies in one incubator.”

“Most of them don’t survive”, the doctor added.

In the freezing temperatures, several babies have died from lack of protection.

In the 56-page report, HRW concluded that Israel — as the occupying power in Gaza — has violated the rights of pregnant women and girls, including the right to dignified care in pregnancy, childbirth, and the postpartum period, as well as the right to newborn care.

The group also emphasized that two pieces of legislation signed by the Israeli Knesset last year and set to go into effect on Tuesday are likely to “further exacerbate the harm to maternal and newborn health.” Effectively, UNRWA cannot obtain permits for its staff and provide desperately needed aid to Gaza because of the bills, which prohibit UNRWA from operating in Israel and occupied East Jerusalem and the Israeli government from speaking with the organization.

The reality is that these upcoming weeks may cause pregnant women and newborns to suffer even more than they already already have, according to Belkis Wille, HRW’s associate crisis, conflict, and arms director, Al Jazeera.

Wille added that “the provisions of the ceasefire don’t really address any of the key requirements that the report specifies.”

According to the report, as of this month, emergency obstetric and newborn care is only available at seven out of 18 partially functioning hospitals across Gaza, four out of 11 field hospitals, and one community health centre.

“Unsanitary and overcrowded conditions” and severe shortages of essential healthcare supplies, including medicines and vaccines, are the main issues at all medical facilities in Gaza. Additionally, the report adds that medical professionals are “hungry, overworked, and occasionally under military attack” who are also working to treat victims of attacks and treat countless cases of waterborne and other communicable diseases.

HRW spoke with Gazan women who were pregnant while they were living there during the war, with Gazan medical professionals, and with international medical personnel who worked for international humanitarian organizations and organizations with teams of international humanitarian organizations.

The impact of the war on access to basic care while pregnant and giving birth is horrifyingly depicted in the interviews.

Little information is available on the survival rate of newborns or the number of women experiencing serious complications or dying during pregnancy, birth, or postpartum, HRW notes. However, the group draws attention to testimony from maternity health experts, who claimed that since the start of the war on October 7, 2023, the rate of miscarriage in Gaza has increased by up to 300 percent. Additionally, it made reference to UN reports that at least eight newborns and infants perished from hypothermia as a result of a lack of basic shelter.

Interactive_HRW_Jan2025_Gaza_report-malnutrition

Israel’s war has led to an unprecedented displacement of some 90 percent of Gaza’s residents, many of whom were displaced multiple times. According to the report, this has made it difficult for pregnant women to access health services safely, noting that both mothers and newborns have largely had no access to postnatal care.

In a different report released late last year, Human Rights Watch came to the conclusion that Israel was engaging in “acts of genocide” by denying Gaza’s Palestinians access to clean water. It also found that Israel’s use of “starvation as a method of warfare” led to severe food insecurity.

Pregnant women’s lack of access to food and water has had a significant impact on both their health and fetal development. According to the report, many pregnant women reported being unable to wash themselves or having dehydration.

Trump says Microsoft in talks to buy TikTok

According to Donald Trump, Microsoft is one of the companies considering purchasing TikTok so the platform can avoid a ban imposed on national security.

Trump responded to a question late on Monday about whether Microsoft was considering buying the well-known video-sharing app, saying, “Yes.”

Trump acknowledged that TikTok was “in high demand,” but he did not provide a comprehensive list of US companies interested in selling.

“I like bidding wars because you make your best deals”, Trump told reporters while travelling from Miami to Washington, DC, on Air Force One.

Microsoft declined to comment. TikTok did not immediately respond to inquiries.

In order to comply with a law mandating the divestment or ban of the platform, TikTok briefly went dark in the US on January 18.

Trump immediately took office, suspending law enforcement for 75 days, giving his administration time to come up with an alternative plan.

Trump attempted to ban TikTok during his first term in office over alleged national security concerns, but reversed his stance during his 2024 presidential campaign, pledging to “save” the platform.

In response to bipartisan concerns that the platform could be used to smuggle Americans’ personal information and influence public discourse, former US President Joe Biden signed the bill facilitating the ban.

Trump announces four new executive orders, including to build ‘Iron Dome’

Donald Trump, the president of the United States, has made it known that he will sign an executive order directing the construction of an “Iron Dome” missile defense program.

Trump made a pledge to bolster US military assets with executive action in the evening at his south Florida golf resort, the Trump National Doral Miami, on Monday during a retreat for Republican lawmakers.

“We have to have a strong, strong defence”, Trump said from the podium. “And in a little while, I’ll be signing four new executive orders”.

The first, he explained, was to “immediately begin the construction of a state-of-the-art Iron Dome missile defence shield, which will be able to protect Americans”.

Two more orders, he added, would be aimed at removing diversity, equity and inclusion (DEI) initiatives and getting “transgender ideology the hell out of our military”.

Additionally, a fourth order would reinstate service members who had been fired for breaking COVID-19 mandates. Between August 2021 and January 2023, approximately 8, 000 members had been discharged for that reason.

Trump argued that the actions were necessary to give the US “the most lethal fighting force in the world.”

A flood of executive orders

The executive actions Trump has taken since returning to the White House on January 20 were yet another ripple in the wave of executive actions.

According to officials, Trump signed a record number of executive actions on his first day in office, amounting to a total of 42 orders, memorandums and proclamations.

Many of those initial orders&nbsp, pertained to immigration and social issues. For instance, he made a move to end birthright citizenship, a constitutionally protected right that endows anyone born in the US with citizenship.

However, some of his earlier executive orders merged with those that were made public on Monday.

He called for the end of government DEI programmes, which he accused of perpetrating “illegal and immoral discrimination”. Additionally, he signed a second law that says the gender identities of men and women are “not interchangeable.”

However, the most recent wave of orders directly affects the US military’s strategic priorities.

Monday’s orders, for example, echo a “transgender military ban” that Trump pursued in 2017, during his first term in office. President Joe Biden later reversed that ban in 2021.

An estimated 8, 000 service members identify as transgender, though more may be reluctant to reveal their gender in public.

Defense Secretary Pete Hegseth’s first day at the Pentagon also coincided with the executive orders Trump unveiled.

Hegseth, a veteran and former Fox News host, has previously criticized what he called the “woke” ideology that is roiling the military and questioned whether women should serve in combat roles.

Hegseth, who is also the head of the Pentagon, has pledged to oversee a significant overhaul of the military’s leadership and to establish a “warrior culture” within the armed forces.

Hesgeth overcame allegations of abuse and alcoholism to receive Friday confirmation from 50 Republican senators.

Three Republicans, including former Senate party leader Mitch McConnell, opposed his nomination.

Creating an “Iron Dome”

The Republican leader made a promise on the campaign trail by putting an “Iron Dome” in Trump’s executive order to create one.

A US-funded air defense system in Israel that detects and intercepts incoming rockets is known as the “iron dome.”

In his campaign for re-election in 2024, Trump had repeatedly stated that he wanted to lead Israel’s Iron Dome system.

He revealed his plans to build “the best Iron Dome in the world” in an August broadcast on the social media platform X.

And in July, he added the Iron Dome proposal to the Republican Party’s official platform.

But military experts have repeatedly questioned whether such a system is necessary, or even feasible, for the US.

Israel’s current defense system only guards against rockets and mortars with a low-power. And Israel itself is only about the size of New Jersey, one of the US’s smaller states.

Given the advanced firepower of potential adversaries like Russia and China, experts claim that building a similar system across the vast US mainland would be prohibitive, not to mention potentially ineffective.

Additionally, Observers point out that the US already has programs in place for missile defense, including those aimed at the Terminal High Altitude Area Defense (THAAD) program and the Ground-Based Midcourse Defense system.

Trump’s Iron Dome project’s future is also uncertain because it almost certainly will need congressional approval for funding.

“You know, we protect other countries, but we don’t protect ourselves”, Trump said on Monday.

Switzerland releases, deports Palestinian American journalist Ali Abunimah

After three days of detention, Palestinian American journalist Ali Abunimah has confirmed that Swiss authorities have detained and released him.

In a social media post on Monday, Abunimah, the executive director of the publication Electronic Intifada, suggested that Switzerland had detained him because of his support for Palestinian rights.

“My ‘ crime’? Being a journalist who supports and defends Israel’s genocide, settler-colonial savagery, and those who support and abet it, he wrote.

Abunimah was detained in Zurich on Saturday, just before he was scheduled to deliver a speech there, causing outrage from Palestinian rights advocates.

The Swiss embassy in Washington, DC, did not immediately respond to Al Jazeera’s request for comment.

According to a report from the Reuters news agency on Sunday, the Swiss police cited a visa ban and other immigration-related measures as the reasons for Abunimah’s arrest.

The Palestinian American journalist claimed that when police interrogated him, they accused him of “offending against Swiss law” without making any specific charges.

He claimed that he was “locked up in a cell for 24 hours a day” and was unable to contact his family. He continued, noting that his phone was only returned at the airport gate for the flight to Istanbul.

Abunimah noted that Switzerland welcomed Israeli President Isaac Herzog to the World Economic Forum in Davos during the time he was imprisoned as a “dangerous criminal.”

Herzog has sparked controversy for his stance on Israel’s war on Gaza, which has killed more than 47, 000 Palestinians. He&nbsp, previously said that there are no “uninvolved civilians” in Gaza.

Abunimah said, “This ordeal lasted three days, but that taste of prison was more than enough to leave me in even greater awe of the Palestinian heroes who endured years and months of imprisonment in the genocidal oppressor.”

More than ever, I am aware that all of our debts must be free and that they must continue to be our main priorities because we can never repay them.

Abunimah’s arrest was deemed an assault on free speech by experts at the UN.

Irene Khan, a UN special rapporteur for freedom of opinion and expression, described Abunimah’s arrest as “shocking news” on Saturday and urged his release.

Francesca Albanese, the UN special rapporteur on human rights in the occupied Palestinian territories, also called for an investigation into the incident.

In a social media post, Albanese wrote that “the climate surrounding freedom of speech in Europe is becoming increasingly toxic.”

Abunimah’s arrest comes as a result of the UN’s review of the Gaza War, which some experts have characterized as a genocide, as a result of an increased clampdown on pro-Palestine voices in Europe.

German authorities detained British doctor Ghassan Abu Sittah, who had worked in Gaza, and blocked him entry in a conference held in April.

German authorities have also been accused of repressing protests throughout the conflict by activists.

The Committee to Protect Journalists (CPJ) claimed that the British counterterrorism police carried out a “disturbing pattern of weaponizing counter-terrorism laws against reporters” when they raided Asa Winstanley’s home in October 2024.

Months earlier, British authorities held journalist Richard Medhurst, who is vocally critical of Israeli policies, for 24 hours as he arrived in London.

The “terrorism” investigation against him was extended until May, according to Medhurst on Saturday.