DeepSeek vs ChatGPT: Bacancy’s Take on AI Disruptors

The landscape of artificial intelligence (AI) is always in the state of evolving. These advancements in the AI industry are bringing new players with the potential to challenge industry leaders. Talking about the industry leader, OpenAI’s ChatGPT is widely recognized as the most successful AI chatbot, setting benchmarks in conversational intelligence and widespread adoption. On the other hand, the emergence of the Chinese AI startup DeepSeek is certainly gaining rapid traction in the global IT market. With its revolutionary technology, DeepSeek is not only challenging well-established firms like OpenAI and Nvidia but also upending the entire conversational AI industry.

Recently, on January 27, 2025, tech stocks experienced a historic downturn as Nvidia, a leader in AI chip manufacturing, suffered a $600 billion market cap loss in a single day. Additionally, the DeepSeek AI model took over the top spot of OpenAI’s ChatGPT as the most downloaded app in the U.S. on Apple’s App Store. This unexpected surge in DeepSeek’s popularity has sparked concerns among some U.S. tech industry observers, who worry that the Chinese startup is rapidly closing the gap with American generative AI leaders at a fraction of the cost.

Before delving into the implications of this new generative AI disruptor, let us first understand the new Chinese AI chatbot and how it compares to OpenAI’s ChatGPT.

What is DeepSeek?

Founded in 2023, DeepSeek is an AI assistant powered by the DeepSeek-V3 model. DeepSeek AI assistant is founded by Liang Wenfeng, co-founder of the Chinese quantitative hedge fund High-Flyer. This Chinese AI company has taken the AI world by storm with its efficient AI assistant. The AI startup is putting efforts in building large language models and advancing artificial general intelligence (AGI), aiming to reach or surpass human-level cognitive abilities.

The company rose to prominence fame after publishing a paper last month that showcases the training of DeepSeek-V3, which required less than $6 million worth of computing power from Nvidia H800 chips. Additionally, after the launch of the R1 reasoning model, it became quite a favorite model among AI developers. Despite its success, DeepSeek’s rapid popularity has raised concerns, particularly regarding the lower costs associated with R1’s development compared to major conversational AI players like OpenAI, Google, and Meta.

DeepSeek vs ChatGPT - A Quick Comparison

With the rise of DeepSeek AI as a formidable competitor in the conversational AI models, it naturally invites comparisons with renowned LLMs like ChatGPT. Although both the AI-powered generative AI chatbots offer advanced conversational capabilities, they differ significantly in terms of cost, efficiency, and accessibility. Here is a quick comparison table of DeepSeek vs ChatGPT.

Aspect	DeepSeek	ChatGPT
Cost Efficiency	More affordable due to lower training costs, optimized GPU usage, and less powerful AI chips.	Higher costs due to extensive computing power requirements and advanced AI chips Web browser, apps, free and premium versions
Accessibility	Free AI assistant for smartphone apps and desktop websites	Web browser, apps, free and premium versions
Computing Power	Uses fewer GPUs and optimized algorithms like MOE	Requires notable computational resources
Reasoning Performance	Excels in logic and reasoning tasks	Strong performance as compared to DeepSeek
Model Architecture	Uses Multi-Head Latent Attention (MHA) and Mixture of Experts (MOE)	Transformer-based architecture with extensive pre-training
Web Search	Limited web search	Offers web integration with partnered publishers
Voice Interaction	Not supported	Supports advanced voice mode for conversations
API Pricing	$0.48 per million tokens	$3–$15 per million tokens, depending on the model
Security concerns	Faced cyberattacks due to rapid adoption	Strong security as compared to DeepSeek
Strengths	Cost-efficient, high reasoning ability	Rich set of features, versatile use cases, precise analysis, and human-like responses

Bacancy’s Take On The Rise Of DeepSeek AI

Similar to every other AI assistant or tool, DeepSeek AI chatbot has its own advantages and limitations. It definitely brings certain challenges and opportunities for businesses looking to embrace AI excellence, along with the potential to signal a major shift in the AI landscape. Here’s what we think you should know and consider about DeepSeek AI before jumping on the bandwagon.

Cost-Efficiency and Accessibility

With innovative training techniques like Multi-Head Latent Attention (MHA) and the Mixture of Experts (MOE), DeepSeek is redefining cost-efficiency in AI development. The Chinese AI chatbot uses lower-cost chips and fewer data resources to build its assistant. The company’s R1 model was built at a fraction of the cost compared to rivals like Meta and OpenAI, which certainly highlights how DeepSeek AI is reshaping the economics of AI development. DeepSeek makes high-quality AI capabilities more accessible to a broader audience.

Challenges to the AI Supply Chain

The emergence of DeepSeek gradually challenges the existing AI supply chain model. The AI assistant bypasses the heavy reliance on high-capital expenditure hardware like GPUs and data centers. DeepSeek’s economic strategy has pushed investors to reconsider the long-term profitability and sustainability of extensive AI infrastructure.

Impact on U.S. Big Tech

The rise of DeepSeek has been placing immense pressure on U.S. tech giants like OpenAI and Microsoft. In January 2025, Nvidia suffered a significant $593 billion loss, dragging down major generative AI players. Nvidia also experienced a downfall in its share price, which fell nearly 17% by Monday’s market close. The chipmaker ASML share is down by nearly 6%, while the Nasdaq share has dropped more than 3%.

Computing Power Reimagined

DeepSeek’s rise could prompt investors to ask difficult questions about the long-term sustainability of costly computing power investments, which in turn potentially pressurizes AI players in the U.S. to justify increased AI capital expenditures in 2026. With Chinese AI chatbots like DeepSeek gaining traction, the focus of AI research may shift from expensive, GPU-heavy models to more efficient, resource-optimized approaches. This might be the beginning of the entire AI development market transformation.

Opportunities for AI-Enabled Devices

DeepSeek’s notable capabilities and efficiency can open up various possibilities for AI integration into everyday consumer devices, such as smartphones. However, when it comes to smartphone integrations, only smaller models of DeepSeek work, as bigger model integrations require hardware upgrades, which again increases the overall cost.

Cybersecurity Concerns

Due to the rapid growth in the popularity of Chinese AI assistants, several cybersecurity issues are emerging as concerns. DeepSeek AI chatbot had limited the registrations on a temporary basis due to the evident cybersecurity attack. Although the issues related to cybersecurity have been resolved by the company, it is still advisable for businesses to ensure appropriate data security and privacy measures before engaging with the new DeepSeek AI chatbot.

Future For DeepSake AI

As Donald Trump stated, the release of DeepSeek AI from a Chinese company serves as a “wake-up call” for industries worldwide. It indeed highlights the need for intense focus on competition to win. That means there might be a collaboration expected between the U.S. and China for their latest AI advancements. With DeepSeek’s faster and more cost-effective AI methods, the global market may shift toward resource-optimized solutions that require less financial investment.