Chinese AI disruptor DeepSeek has claimed the top spot in the US App Store, dethroning the renowned ChatGPT. This breakthrough marks a significant shift in the artificial intelligence landscape, as DeepSeek's innovative approach uses fewer chips from Nvidia competitor AMD. The emergence of DeepSeek has raised questions about the future viability of data centers across Southeast Asia, a region that has heavily invested in these resource-intensive facilities.
Established tech giants now face the challenge of a cost-effective newcomer that threatens their multibillion-dollar development budgets. DeepSeek's release of a free AI chatbot, developed for just US$6 million, represents a fraction of what Silicon Valley giants like Microsoft have spent on their competing versions. This development has led to a decline in US tech stocks, with Nvidia experiencing the most significant hit due to concerns over the disparity in development costs. Nvidia, the leading chip manufacturer for AI model training, finds itself at a crossroads as DeepSeek offers a more economical alternative.
DeepSeek's primary competitors include Microsoft-backed OpenAI and Google's Gemini, both of which have invested billions in their AI endeavors. The stark contrast in development budgets—DeepSeek's US$6 million compared to its rivals' multibillion-dollar investments—has sent ripples across the tech industry. As a result, questions have arisen over the sustainability of Southeast Asia's substantial investments in data centers, which are essential for supporting AI advancements.
The release of DeepSeek's AI chatbot has highlighted these concerns, prompting Southeast Asian nations to reconsider their bets on data center infrastructure. The resource-intensive nature of these facilities poses a challenge in a rapidly evolving AI landscape.
“It is still too early to say how DeepSeek will change the entire ecosystem, but what it has done is it has definitely forced investors to rethink their investments in AI,” said Adib Zalkapli, managing director of Viewfinder Global Affairs.
“We can expect more similar competitions and disruptions in [the] future,” Zalkapli added.
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