On 27th January 2025, the business world witnessed a huge stir in the market as the shares of US tech giant Nvidia saw $600bn of its market value disappear. This news created a spark all around and shocked the entire tech industry.
But what was the reason? What caused Nvidia to face that huge loss? Was China behind it?
Hold on, hold on! We will address everything.
In the tech industry, everyone knows that success is not permanent. One day, a tool may dominate, but the next day, another can take its place.
Since 2022, ChatGPT has ruled the AI industry unopposed. But with the advent of DeepSeek, tables turned upside down and the world turned towards DeepSeek. Consequently, OpenAI’s closely linked Nvidia felt a sheer impact as its GPUs are used in OpenAI to develop AI models.
Incredibly, in a very short span, DeepSeek became the # 1 most downloaded app with over 2.6 million users on the App Store and Google Play Store.
Hence this was the reason for the drastic drop in Nvidia’s market share.
Keeping the novelty and trend in view, CodingCops decided that its readers must understand what DeepSeek is and how it is going to challenge ChatGPT. So, let’s have a detailed discussion.
What is DeepSeek?
DeepSeek has ultimately challenged the widely adopted ChatGPT while bringing a fresh perspective to the modern artificial intelligence industry. Moreover, it is an open-source tool and has captivated a huge audience for its impressive capabilities and cost-effectiveness.
Launched by a Chinese AI company, DeepSeek is built on large language models (LLMs). This model is nothing but a type of ML model trained on a large text dataset. It can generate human-like output and predict in the same way.
Focus of DeepSeek
DeepSeek focuses on delivering splendid, precise, and customized responses. It is very different from many generalized AI models in the market as its entire focus is on providing precision and depth to various fields.
Whether you are a programmer, marketer, influencer, or creative writer, DeepSeek will cater to all your requirements.
Moreover, DeepSeek allows you to easily integrate with other platforms and workflows. It not only enhances productivity and efficiency but promotes peace of mind.
What Caused Stir in the AI Industry?
After the release of R1, DeepSeek released its AI Assistant powered by DeepSeek-V3. In no time, it took over its greatest competitor ChatGPT, and became the top free application on Apple’s App Store in the United States.
This unexpected success was nothing short of a surprise for US companies, especially Nvidia and OpenAI who were shocked to see their market sinking.
Even President Trump couldn’t resist on the matter and had to speak and termed it as a “Wakeup Call for their industries”.
Additionally, DeepSeek is impressively cost-effective compared to OpenAI.
DeepSeek V3 vs DeepSeek R1
DeepSeek launched its two models, DeepSeek V3 and DeepSeek R1. Let’s find out what they both have for us.
What is DeepSeek V3?
When you open the DeepSeek application or website, the default model is DeepSeek V3. This versatile LLM captivates user attention as a general-purpose tool, capable of completing various tasks.
It is extremely powerful and is ahead of other popular language models such as ChatGPT. It is free to use and a reliable choice for everyday tasks.
Moreover, V3 follows the Mixture-of-Experts (MoE) approach. This approach allows the model to choose from different “experts” to perform specific tasks. Once you give a prompt to your model, you will get results from the most relevant part of the model.
What is DeepSeek R1?
On the other hand, DeepSeek R1 is a strong reasoning model that can solve intricate tasks demanding advanced-level reasoning and problem-solving capabilities. If you are a programmer, R1 is best for you as it can tackle complex and heavy logic questions.
So, If you are a professional seeking assistance in professional and cognitive operations, take R1 as your go-to partner.
Note: You can activate the R1 model by clicking the “DeepThink (R1)” button.
V3 vs R1 – A Quick Differentiation
The V3 and R1 models differ in many ways. We try to enlighten you on the differences between both models from technical and non-technical perspectives so that you can better understand them.
| Aspects | DeepSeek V3 | DeepSeek R1 |
| Purpose | General-purpose tasks | Best for logical reasoning and problem-solving. |
| Architecture | Mixture-of-Experts (MoE) | Reinforcement learning model |
| Creative Content Generation | Best for creative writing, social posts, marketing copy, etc. | Furnish exceptional results for technical writing, white papers, etc. |
| Coding Tasks | Helpful in general coding tasks. | Assists in debugging, can solve complex mathematical tasks. |
| Focus | Focuses on versatility and flexibility. | Gives attention to deep reasoning, mathematical problems, and complex problem-solving tasks. |
| Real-time Efficiency and Scalability | Can handle thousands of requests concurrently. | Not capable of handling huge requests concurrently but works best on low-resource hardware. |
DeepSeek V3 vs DeepSeek R1 – Differences Explained
Creative Content Generation
V3 and R1, both master the area of content generation. V3 is stronger in generating dynamic content such as creative blog posts, storytelling, writing social media posts and captions, marketing copy, etc.
Whereas R1 masters the area of structured creativity or you can say it is more on the formal/technical side. Using the R1 model, you can write technical content, technical blog posts, legal documents, white papers, academic writing, etc.
Technical Problem-Solving
Now, let’s find out the performance of both models in the technical tasks.
The DeepSeek V3 model can prove to be helpful in general coding tasks. Moreover, it can assist in explaining concepts in simpler terms.
On the other hand, R1 focuses on deep reasoning, making it a perfect choice for solving logical and mathematical problems. Moreover, people involved in scientific research and complex problem-solving tasks must utilize R1’s powers.
Focus
DeepSeek V3’s focus is entirely on versatility and flexibility. It is capable of handling various tasks without the need for customization. Furthermore, V3’s powers can be used for applications looking to process language and multiple contexts.
While R1 puts its attention on deep reasoning which makes it a perfect choice for solving logical and mathematical problems. Moreover, people dealing in scientific research and complex problem-solving tasks must utilize the powers of R1.
Real-Time Efficiency and Scalability
The V3 model of DeepSeek can handle thousands of requests at a time while giving top-notch results. It is built for high-throughput cloud environments.
Meanwhile, R1 is not meant to handle several concurrent requests but can surprise you on low-resource hardware such as legacy systems, edge devices, etc.
Pros and Cons of DeepSeek
| Pros | Cons |
| Open-source and cost-effective than other large language models. | Might give biased responses. |
| Furnish high performances in complex tasks such as coding, technical writing, debugging, problem-solving, etc. | Requires verification in complex responses. |
| Give faster response times for structured queries | The interface might feel less interactive for casual users. |
| Able to handle huge and complex mathematical problems. | |
| Easily adapts to industry-specific requirements. |
Why is DeepSeek a Concern for the United States?
One simple answer to this query is that DeepSeek is a Chinese product so it is a matter of concern for the United States. However, it is not that simple.
If it were, it wouldn’t have cost Nvidia billions of dollars.
Here are the reasons why DeepSeek is raising alarms for the US authorities and market.
China Achieved this Feat Despite Restrictions
Imagine having sanctioned a nation by not allowing them to have Nvidia GPU chips widely used for AI models, and still coming up with the best and leading AI tool DeepSeek.
The Chinese company made DeepSeek and showed the world that they can’t be written off the cards by not allowing them to have the most advanced technology.
The Cost of DeepSeek is Very Low
According to DeepSeek claims, they developed their R1 model for less than $6 million. That’s highly cost-effective, if true.
Hence, it is also a point of concern for the US tech companies that invested billions of dollars in OpenAI.
Threat to OpenAI’s Business Model
As we mentioned above, DeepSeek is entirely free. Its open-source nature is a threat to the US companies charging monthly to the users using ChatGPT.
Like seriously, why would one choose a paid version for a tool that is available free of cost?
Data Security and Privacy
Additionally, DeepSeek is developed by a Chinese company and it is a matter of concern for US authorities. It is often observed that the Chinese companies have ties with the Chinese government and this creates a risk of data security and privacy breach.
Economic Impact
Lastly, the US companies and authorities also think that if DeepSeek crossed them in artificial intelligence, there are chances that their economic dominance will vanish. This will further lead to an impact on employment and technological innovation in the country.
Attack on DeepSeek
You must have heard the phrase, “The tallest tree catches the most wind”. Hence a similar thing happened with DeepSeek.
The popularity of DeepSeek became an eyesore for cyberattackers. They got a challenge to hit the newly launched platform and they did it very well.
Just after it sunk the market of Nvidia, DeepSeek got hit by a DDoS attack. DeepSeek reported a large-scale cyber attack on their services. As a result, the company had to temporarily limit the new registrations for tackling the matter.
In spite of the attack, the services of DeepSeek don’t shake for the existing users. Moreover, within 24 hours, the company was able to identify the issue and handle it masterly.
Summary
In conclusion, it is important to understand that new technologies emerge, and the old ones obsolete. Only the ones with better services, community support, and customer satisfaction stay on the tech horizon. Similarly, if DeepSeek maintained its standards and focused on its services rather than competing with other platforms, it would stay.
Moreover, if you are stuck in deciding which one is better in ChatGPT and DeepSeek, it is advised to test both. And based on the results, decide which one’s good for you.
Frequently Asked Questions
What is DeepSeek?
DeepSeek is an AI model that handles simple to complex tasks effortlessly. Specifically, it is designed for code generation, mathematical operations, debugging, machine learning tasks, etc.
Is DeepSeek free to use?
Yes, DeepSeek is a completely open-source platform which makes it free to use.
Can DeepSeek be used for coding?
Yes, both the models of DeepSeek are usable for coding. Not only coding, it also assists in debugging.
What makes the R1 model unique?
Reasoning and thinking like humans make the R1 model unique.
What is the impact of DeepSeek on the AI industry?
With its advent, the development of AI models has become cost-efficient. Moreover, it has enabled and encouraged more people to utilize AI for their day-to-day tasks.
