At the beginning of the year, the AI industry was shaken by the release of DeepSeek’s model, which required exceptionally low investment. This not only caused surprise but also raised questions about the billions invested by AI industry leaders in developing advanced AI products. Inevitably, this also led to a reaction from AI leaders upon seeing this new potential market leader and its mentioned capabilities. One of DeepSeek’s main competitors is OpenAI, whose response to this breakthrough we will analyse in this article.
DeepSeek’s News Breakthrough
In January, all attention turned to DeepSeek – Chinese AI startup that introduced new open-source models (V3 and R1) developed with minimal costs. It is stated that only about $6 million was required, whereas META invested over $39.3 million in its Llama 3 model series. The released DeepSeek AI assistant exceeded all expectations, as it rapidly gained popularity in the Apple App Store, surpassing OpenAI’s mobile application – ChatGPT.
These tendencies created turbulence in the market, raising doubts about the value of major AI giants’ investments when one of the market leaders proves that things can be done differently. As a result, on January 27, the stock market saw a sell-off due to investor concerns about the future.
Among the most widely discussed was Nvidia – the global leader in accelerated computing and computer chip supply – whose stock dropped by 17% that day. This event was recognized as one of the record single-day percentage declines in Wall Street stock market history.
OpenAI’s Reaction
DeepSeek itself stated that its developed models are competitive and can match the AI giant. Therefore, it is not surprising that AI industry leaders are responding to these changes.
While META announced its intention to modify its strategy, OpenAI expressed its stance. Shortly after this news broke, the AI giant CEO Sam Altman evaluated DeepSeek’s R1 model as “an impressive model, particularly around what they’re able to deliver for the price.” However, despite acknowledging that DeepSeek managed to achieve a solid result, the ChatGPT creator does not plan to revert to less advanced chips: “More compute is more important now than ever before to succeed at our mission.”
In January, U.S. President D. Trump announced the planned Stargate project, which, together with OpenAI, Oracle, and SoftBank, will invest in and implement AI data centre infrastructure expansion. Therefore, it is no surprise that the Sam Altman aims to maintain a clear AI vision, as such infrastructure development is based on greater computing power.
Nevertheless, DeepSeek’s breakthrough could change the future rules of AI, proving that massive investments in AI infrastructure may no longer be the key innovation. Companies will need to focus on what they can truly create using AI, as experience shows that large investments in AI infrastructure have not always met expectations for AI products.
Final Thoughts
With the ability to create AI models at a lower cost, perhaps it will be possible to develop more AI products that attract users. While it is not yet entirely clear how DeepSeek’s breakthrough will impact the further development of AI, OpenAI will inevitably have to consider new measures in response – whether by accelerating the release of new models, enhancing AI products with new features, continuing to develop models based on large computational resources, or identifying niche areas where AI can truly make an impact while maintaining its leadership position.
If you are interested in this topic, we suggest you check our articles:
- DeepSeek: The Chinese AI Firm Disrupting Global Industry
- DeepSeek R1 Chatbot: How to Navigate the New Model
- How Does DeepSeek Truly Compare to ChatGPT?
- OpenAI Strives for the Most Human-Like Voice
Sources: Big Technology, Forbes, Inc
