Chinese tech startup DeepSeek has come roaring into public view shortly after it released a model of its artificial intelligence service that seemingly is on par with U.S.-based competitors like ChatGPT, but required far less computing power for training.

The claims around DeepSeek and the sudden interest in the company have sent shock waves through the U.S. tech market — causing major stock price shifts on Monday.

The impact of DeepSeek has been far-reaching, provoking reactions from figures like President Donald Trump and OpenAI CEO Sam Altman.

Here’s what you need to know about DeepSeek.

What is DeepSeek and what does it do?

DeepSeek is a large language model AI product that provides a service similar to products like ChatGPT.

Using a phone app or computer software, users can type questions or statements to DeepSeek and it will respond with text answers.

DeepSeek’s models are bilingual, understanding and producing results in both Chinese and English.

DeepSeek released its model, R1, a week ago. In terms of performance, R1 is already beating a range of other models including Google’s Gemini 2.0 Flash, Anthropic’s Claude 3.5 Sonnet, Meta’s Llama 3.3-70B and OpenAI’s GPT-4o, according to the Artificial Analysis Quality Index, a well-followed independent AI analysis ranking.

Who is behind DeepSeek?

DeepSeek was created in Hangzhou, China, by Hangzhou DeepSeek Artificial Intelligence Co., Ltd.

DeepSeek was founded in 2023 by Liang Wenfeng, who also founded a hedge fund, called High-Flyer, that uses AI-driven trading strategies.

Liang has said High-Flyer was one of DeepSeek’s investors and provided some of its first employees.

How has the market reacted to DeepSeek?

Tech stocks dropped sharply on Monday, with stock prices for companies like Nvidia, which produces chips required for AI-training, plummeting.

Big U.S. tech companies are investing hundreds of billions of dollars into AI technology, and the prospect of a Chinese competitor potentially outpacing them caused speculation to go wild.

On Tuesday morning, Nvidia’s price was still well below what it was trading at the week before, but many tech stocks had largely recovered.

In a statement issued Monday, Nvidia called DeepSeek an “excellent AI advancement,” but maintained that Nvidia’s own products were required for AI inference. According to DeepSeek, its product was trained using a lower-than-expected number of Nvidia chips.

How have tech figures and competitors reacted?

At the World Economic Forum in Switzerland, Microsoft CEO Satya Nadella — whose company is one of OpenAI’s biggest investors — called DeepSeek’s new model “super impressive.”

Entrepreneur Marc Andreessen, known for co-writing Mosaic, one of the world’s first web browsers, wrote Sunday on X that “DeepSeek R1 is AI’s Sputnik moment,” likening it to the space race between the U.S. and the Soviet Union and the event that forced the U.S. to realize that its technological abilities were not unassailable.

OpenAI CEO Sam Altman appeared to take a jab at DeepSeek last month, after some users noticed that V3, which served as the foundation for R1, would occasionally confuse itself with ChatGPT.

But on Monday, Altman said the new R1 was “an impressive model, particularly around what they’re able to deliver for the price.”

“We will obviously deliver much better models and also it’s legit invigorating to have a new competitor!” he wrote on X. “We will pull up some releases.”

Are there security or other concerns around DeepSeek?

As a Chinese service, DeepSeek has faced similar criticisms in the U.S. as other apps with Chinese ties. Experts have noted that data provided to DeepSeek could be stored and subject to surveillance under Chinese law.

DeepSeek also appears to censor topics or express specific political leanings when responding to some questions about China.

When asked about the sovereignty of Taiwan, a self-ruling island democracy that Beijing claims as its territory, DeepSeek’s R1 sometimes states the subject is “beyond my current scope.” Other times, the model describes Taiwan as “an inalienable part of China’s territory,” adding: “We firmly oppose any form of ‘Taiwan independence’ separatist activities and are committed to achieving the complete reunification of the motherland through peaceful means.”

How have politicians reacted?So far, reactions to DeepSeek from U.S. politicians have varied — with some calling for tight regulation and others issuing more muted statements.

On Monday, President Donald Trump said DeepSeek could be a “positive development” for the AI-industry, adding that its success “should be a wake-up call” for American tech companies. He did not explicitly call for regulation in response to DeepSeek’s popularity.

Rep. John Moolenaar, R-Mich., the chair of the House Select Committee on China, said Monday he wanted the United States to act to slow down DeepSeek, going further than Trump did in his remarks. 

Sen. Mark Warner, D-Va., defended existing export controls related to advanced chip technology and said more regulation might be needed.