It’s powered by the open-source DeepSec-V3 model, which researchers claim was developed for less than 6 million euros ($7.5 million) — significantly less than the billions spent by competitors. .
But this claim has been disputed by others in the AI space.
The researchers say they use already existing technology as well as open source code – software that can be used, modified or distributed by anyone for free.
Deepsec’s emergence comes as the US is banning the sale of advanced chip technology that powers AI to China.
To continue their work without a steady supply of imported high-end chips, Chinese AI developers have shared their work with each other and experimented with new approaches to the technology.
This has resulted in AI models that require much less computing power than before. It also means they cost less than previously thought, which has the potential to sustain the industry.
Following the launch of the Deepsec-R1 earlier this month, the company said it performed on par with “one of the latest models from chatbot maker Openei” – when used for tasks such as math, coding and natural language reasoning. is done
Marc Andreessen, a Silicon Valley venture capitalist and adviser to Donald Trump, called DePicek-R1 “AI’s Sputnik moment,” a reference to the satellite launched by the Soviet Union in 1957.
At the time, it was believed that the US had been caught off-guard by their rival’s technological success.
Dipsec’s popularity has spooked the markets. Dutch chip equipment maker ASML saw its share price fall more than 10 percent while shares in Siemens Energy, which makes AI-related hardware, fell 21 percent.
“This idea of a low-cost Chinese version hasn’t necessarily caught on, so it’s taken the market a little bit by surprise,” said Fiona Cincotta, senior market analyst at CitiIndex.
“So, if you suddenly get this low-cost AI model, it’s going to raise concerns about the profitability of competitors, especially given the money they’ve already invested in more expensive AI infrastructure. “
And Singapore-based technology equity adviser V-Cenergens told the BBC it could “potentially derail the investment case for the entire AI supply chain”.
But Wall Street banking giant Citi has warned that while Dipsec could challenge the dominant positions of US companies such as Openai, problems facing Chinese firms could hinder their growth.
“We estimate that in an inevitably more restrictive environment, access to more advanced US chips is an advantage,” its analysts said in a report.
Last week, a consortium of US tech firms and foreign investors announced the Stargate project, a company that is pouring £500bn into AI infrastructure in Texas.
