 "Experts are also wary of one more factor — the veracity of DeepSeek’s claims about the costs of training its AI models, and just how many of the H800 processors they used to train their models. Image Credit: Reuters")
Chinese AI app DeepSeek has stunned the tech world, quickly climbing to the top of the App Store and challenging established players like Apple Intelligence, Google Gemini, and OpenAI’s ChatGPT.
Within just a week of launching its new large language model (LLM), DeepSeek has garnered massive attention, marking a significant shift in the generative AI landscape. However, as quickly as it has captured the spotlight, DeepSeek could face hurdles that might stifle its growth, particularly due to China’s strict data policies and the country’s history of misleading consumers and at times entire countries about the true nature of its tech products.
Cheaper price point attracts a lot of attention
DeepSeek, much like ChatGPT, functions as a chat application, where users can ask questions and perform tasks, receiving responses based on a vast language model. What sets DeepSeek apart is how it managed to release its model at a fraction of the cost of its competitors.
The app, built on the DeepSeek-V3 LLM, was made available as an open-source model, which allows anyone to download and use it. With limited resources, including restricted access to high-end AI chips, DeepSeek’s development team had to get creative.
By making their model more resource-efficient, they were able to offer an effective AI at a significantly lower price—reportedly only $5.58 million, compared to billions spent by Western firms like OpenAI and Microsoft.
This innovative, low-cost approach has sent shockwaves through the AI market, with investors particularly rattled. Major companies, including Nvidia, saw massive losses, as DeepSeek demonstrated that AI could be developed efficiently without the need for expensive hardware. However, while DeepSeek’s cost-effective model has made waves, it’s unlikely to sustain its dominance in the long run.
The data privacy dilemma
The main concern surrounding DeepSeek revolves around the company’s data collection and its ties to China. DeepSeek’s privacy policy clearly states that all user data, including conversations, search histories, and uploaded files, are stored in China. Users can delete their chat history, but there are worries about the volume of data collected automatically, including device information, IP addresses, and even keystroke patterns.
While many AI platforms collect similar data, the issue with DeepSeek is that it sends this information back to China, where it could be subject to the country’s strict cybersecurity laws and make its way to ther Chinese Communist Pary. These laws require companies to cooperate with national intelligence efforts, raising serious concerns about government surveillance and the potential for data misuse.
Moreover, DeepSeek has faced accusations of censorship, particularly on sensitive topics like the 1989 Tiananmen Square massacre. This raises red flags about the platform’s potential to manipulate information and subtly push Chinese government narratives, further intensifying geopolitical concerns.
Global pushback
While DeepSeek’s rise has certainly caught the attention of the AI industry, it faces significant resistance from the West, especially the United States. The US government has long been wary of Chinese tech companies, citing national security risks. Past examples, such as the ban on Huawei and ongoing issues with TikTok, underscore the challenges that Chinese companies face in gaining a foothold in Western markets.
If DeepSeek continues to grow in prominence, it’s likely that it will attract regulatory scrutiny in the US and other parts of the world. This could lead to investigations and potential bans, much like the treatment of other Chinese tech giants like TikTok and Huawei.
The US and other Western nations are already suspicious of Chinese tech, and DeepSeek’s close ties to the Chinese government could make it an easy target for regulators. Even if the company doesn’t face an outright ban, its ongoing success may trigger calls for investigations into data privacy violations and security risks. This could ultimately dampen its chances of long-term success in Western markets.
Chinese startups and a history of misleading claims
DeepSeek isn’t the first Chinese tech company to face criticism over its transparency and data practices. In recent years, Chinese startups and the government have often been accused of misleading users about the nature of their products, particularly concerning data privacy and security.
From Huawei’s controversial relationship with the Chinese government to the ongoing concerns about TikTok’s data harvesting, there’s a growing distrust of Chinese tech products in the Europe and the US.
Experts are also wary of one more factor — the veracity of DeepSeek’s claims about the costs of training its AI models, and just how many of the H800 processors they used to train their models.
This history of misleading claims has cast a shadow over DeepSeek, with many experts recommending taking a cautious approach about the potential risks involved in using the app. The lack of transparency regarding DeepSeek’s data policies, coupled with concerns about censorship and government control, makes it difficult for many to fully trust the platform. As with other Chinese tech products, the question remains whether DeepSeek can continue to thrive in the face of mounting scrutiny or if its rise will be short-lived, eclipsed by the same geopolitical and regulatory challenges that have hindered other Chinese tech giants.
What’s next for DeepSeek
DeepSeek’s rise has undoubtedly shaken the AI industry, proving that AI can be developed more cheaply and efficiently than previously thought. However, its ties to China, concerns about data privacy, and the potential for censorship make its long-term success uncertain.
While it has caught the attention of global investors and users, the road ahead is likely to be bumpy, with regulatory scrutiny and geopolitical tensions threatening its growth. The history of Chinese tech companies being scrutinised for misleading practices only adds to the uncertainty surrounding DeepSeek’s future in the global market.