Unless you’ve been living under a rock, you’ve probably heard about DeepSeek’s sudden rise—a moment some are calling a “Sputnik-like” event for the U.S. AI industry.
Even if you’re not into AI development, this breakthrough will impact you in ways you might not expect. And if you’re looking to hire an AI engineer or specialist, this is must-read.
Let’s dive in.
For months, the U.S. has led the AI revolution, with investors pouring billions of dollars into artificial intelligence. The race toward artificial general intelligence (AGI) has been fueled by one major belief: building powerful AI requires massive computing power and energy.
For example, the most advanced AI models need between 16,000 and 100,000 GPUs just for training..
So, when OpenAI CEO Sam Altman was asked if a small team with just $10 million could build a strong AI model, his response was…
But then, DeepSeek came. Their latest model, R1, has challenged everything we thought we knew about AI development and deployment. The impact was immediate.
In January 2025, DeepSeek became the most downloaded free app on Apple’s App Store worldwide. It also topped the charts on the Google Play Store in the U.S. In fact, its impact has been so profound that President Donald Trump called it “a wake-up call” for American tech-industry.
So, what happens next?
Is this the end of ChatGPT and other U.S.-based AI models?
Or is the AI landscape about to shift once again?
But before diving in, let’s start from the beginning.
DeepSeek: The AI Company Shaking Up the Industry
DeepSeek is an artificial intelligence (AI) company based in Hangzhou, China. It started as a university startup just a few years ago. Like many other AI companies, its goal is to develop artificial general intelligence (AGI). However, DeepSeek has taken a different approach—one that dramatically cuts costs compared to its competitors.
How is R1 Different from Other AI Models?
Before DeepSeek’s R1, most people believed that building powerful AI required massive computing power, energy, and expensive data centers. But DeepSeek took a different approach.
- Efficient Internal Architecture – R1 uses less memory, which means it needs fewer resources to function.
- Lower Computational Costs – Each interaction with the AI is much cheaper compared to models like ChatGPT and Llama.
- Better at Math & Reasoning – Despite its lower costs, R1 can solve complex math, coding, and reasoning problems just as well as its competitors.
While companies like OpenAI and Google spent billions of dollars and years developing their AI models, DeepSeek trained R1 in just two months. And they did it using H800 GPUs, a weaker, restricted version of NVIDIA chips designed for the Chinese market. The total cost? Less than $6 million—a fraction of what U.S. companies have spent.
So, if you have ever dreamt of launching your own AI model, do not let your dreams be deterred by the costs. Hire ai developers and leverage their ingenuity to overcome barriers you think are unsurmountable.
Why Has US Tech stocks Taken a Hit?
These numbers prove that DeepSeek is far more cost-efficient than its U.S. rivals. Its rise has also made investors rethink the sky-high valuations of U.S. tech stocks.
The big question is:
“If AI models like DeepSeek’s R1 can match the performance of ChatGPT-4o while using a fraction of the computing power, is the demand for high-end chips, data centers, and massive energy infrastructure really justified?”
Some believe this could disrupt the entire AI industry, while others see it as a reality check for the overvalued U.S. tech market.
DeepSeek’s impact was immediately visible on Wall Street:
- S&P 500 dropped 1.5%
- Nasdaq Composite plunged 3.07%
- Philadelphia Semiconductor Index fell 9.2%
The drop in indices showcase a big concern amongst investors: Are the hundreds of billions pledged by tech giants for energy and computing infrastructure necessary to achieve artificial general intelligence?
Is DeepSeek a better AI than ChatGPT?
No, DeepSeek isn’t better than ChatGPT—but based on the available data, it is more cost-effective.
Is DeepSeek safe to use?
Recent reports have raised security and privacy concerns regarding DeepSeek’s AI application. For instance, the DeepSeek iOS app disables App Transport Security, allowing data to be sent over unencrypted channels, which poses significant privacy risks. Additionally, security evaluations have identified vulnerabilities, including susceptibility to jailbreaking and malware creation requests.
Due to these issues, some U.S. states, such as New York and Virginia, have banned the use of DeepSeek AI on government devices and networks. Therefore, is you are thinking about hiring ai specialists trained on DeepSeek, you should exercise caution.
What is the best competitor of ChatGPT?
There are several competitors of ChatGPT, each excelling in particular areas.
- Google Gemini: Known for its multimodal processing capabilities, integrating text, images, and audio inputs.
- Microsoft Copilot: An AI-enhanced productivity tool integrated into Microsoft Office, offering advanced assistance across various applications.
- Claude: Recognized for creative and conversational text generation, providing human-like interactions.
- Perplexity AI: Excelling in retrieving reliable data sources, making it a valuable tool for research purposes.
Conclusion
The rise of DeepSeek proves that advanced AI can now be built without the massive energy, cooling, and computing power once thought necessary.
If you’re considering hiring AI engineers to build and deploy your own AI model, now is the time. You can further cut costs by hiring remote employees at a fraction of local salaries and leveraging AI cloud services. However, security concerns remain, so it’s important to proceed with caution before fully adopting this model. Like any major technological breakthrough, its true impact will only be clear over time.
Until then, you can connect with our experts to plan your next move and hire top remote talent—from part-time virtual assistants to skilled AI engineers—at a fraction of the local cost.
