DeepSeek, the Chinese AI assistant app that recently took the US market by storm, faced a large-scale cyber attack on Monday. The breach forced the company to temporarily limit new registrations, though existing users remained unaffected. This incident occurred as DeepSeek skyrocketed to the top of Apple’s App Store and gained significant traction on Google Play, making it the highest-rated free app in the US.
The Attack and Its Aftermath
DeepSeek announced the security breach on its status page, stating that it began investigating the issue late Monday night Beijing time. After two hours of monitoring, the company identified the attack as a “large-scale malicious attack.” To mitigate risks, DeepSeek restricted new user registrations but swiftly resumed sign-ups once security measures were reinforced.
Despite the cyber attack, DeepSeek’s popularity continues to soar. The app, which offers AI assistance similar to OpenAI’s ChatGPT, has gained significant attention for delivering cutting-edge capabilities at a fraction of the cost. Many industry experts see this as a game-changer, particularly given China’s ongoing challenges with US chip export restrictions.
Impact on the Tech Industry
The rapid ascent of DeepSeek has sent shockwaves through the global tech industry, particularly in the US. The app’s ability to rival major AI models while operating on a budget of just $5 million has raised concerns among American investors and tech leaders. Following DeepSeek’s success, Nvidia, the world’s leading AI chipmaker, saw its stock value drop by 13.6%, wiping out approximately $500 billion in market capitalization.
The incident has also fueled discussions among influential figures. Venture capitalist Marc Andreessen labeled DeepSeek’s rise as AI’s “Sputnik moment,” drawing parallels to the Cold War-era space race. Politician and entrepreneur Vivek Ramaswamy echoed this sentiment, urging the US to respond proactively rather than panic.
US Response and AI Race Intensifies
The rise of DeepSeek has prompted strong reactions from American political and business leaders. Former President Donald Trump, who was attending a House Republicans conference in Florida, called the emergence of DeepSeek a “wake-up call” for US tech companies. He emphasized the need for American businesses to stay competitive and innovate aggressively.
In response, Trump recently announced a $500 billion AI venture named Stargate, in collaboration with OpenAI, SoftBank, and Oracle. While the project aims to solidify the US’s dominance in AI, its funding and viability have already been questioned. Tesla and SpaceX CEO Elon Musk, a key AI advocate, openly criticized OpenAI CEO Sam Altman over the details of the investment.
A New Era in the AI Market
DeepSeek’s cyber attack highlights the growing risks AI companies face as they gain prominence. However, it also underscores the rapid evolution of AI technology and its geopolitical implications. With China making significant strides despite restrictions, and the US responding with large-scale investments, the global AI race is entering a new and highly competitive phase.
As DeepSeek recovers from the attack and continues its expansion, the battle for AI supremacy between the US and China is far from over. The question remains: Will DeepSeek’s low-budget success redefine the AI landscape, or will American tech giants reclaim their dominance? Only time will tell.