Chinese AI Startup DeepSeek Overtakes ChatGPT on Apple App Store

ChatGPT logo is seen in this illustration taken, January 22, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
ChatGPT logo is seen in this illustration taken, January 22, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
TT

Chinese AI Startup DeepSeek Overtakes ChatGPT on Apple App Store

ChatGPT logo is seen in this illustration taken, January 22, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
ChatGPT logo is seen in this illustration taken, January 22, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

Chinese startup DeepSeek's AI Assistant on Monday overtook rival ChatGPT to become the top-rated free application available on Apple's App Store in the United States.

Powered by the DeepSeek-V3 model, which its creators say "tops the leaderboard among open-source models and rivals the most advanced closed-source models globally", the artificial intelligence application has surged in popularity among US users since it was released on Jan. 10, according to app data research firm Sensor Tower.

The milestone highlights how DeepSeek has left a deep impression on Silicon Valley, upending widely held views about US primacy in AI and the effectiveness of Washington's export controls targeting China's advanced chip and AI capabilities, Reuters reported.

AI models from ChatGPT to DeepSeek require advanced chips to power their training. The Biden administration has since 2021 widened the scope of bans designed to stop these chips from being exported to China and used to train Chinese firms' AI models.

However, DeepSeek researchers wrote in a paper last month that the DeepSeek-V3 used Nvidia's H800 chips for training, spending less than $6 million.

Although this detail has since been disputed, the claim that the chips used were less powerful than the most advanced Nvidia products Washington has sought to keep out of China, as well as the relatively cheap training costs, has prompted US tech executives to question the effectiveness of tech export controls.

Little is known about the company behind DeepSeek, a small Hangzhou-based startup founded in 2023, when search engine giant Baidu released the first Chinese AI large-language model.

Since then, dozens of Chinese tech companies large and small have released their own AI models, but DeepSeek is the first to be praised by the US tech industry as matching or even surpassing the performance of cutting-edge US models.



Apple, Nvidia Losses Keep S&P 500, Nasdaq Flat as Fed's Rate Verdict Looms

A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
TT

Apple, Nvidia Losses Keep S&P 500, Nasdaq Flat as Fed's Rate Verdict Looms

A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
A smartphone with a displayed NVIDIA logo is placed on a computer motherboard in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

The S&P 500 and the Nasdaq treaded water on Wednesday, as losses in tech heavyweights Apple and Nvidia limited broader gains and investor focus turned to the US Federal Reserve's interest-rate decision, expected later in the day.

Markets widely expect the central bank to hold its lending rate steady in its decision, due at 2 p.m. ET.

"Without clarity on the macro impact of a range of government policies, primarily tariffs, but also on tax policy and the labor market impact of immigration policy, we think it's fair to expect limited guidance from the Fed today," Goldman Sachs economists said in a note.

At 9:46 a.m. ET, the Dow Jones Industrial Average rose 23.73 points, or 0.05%, to 44,874.08, the S&P 500 lost 16.71 points, or 0.26%, to 6,052.02, and the Nasdaq Composite lost 112.68 points, or 0.53%, to 19,628.68.

Six of the 11 S&P 500 sectors were in the red, with technology stocks leading declines with a 1.1% fall.

Nvidia dropped 3.3% after gaining close to 9% on Tuesday. Its shares were hammered on Monday, after Chinese startup DeepSeek launched AI models it said were cost-effective and ran on less advanced chips compared to OpenAI.

Apple shed 1.1% after brokerage Oppenheimer downgraded its rating to "perform" from "outperform". The iPhone maker is scheduled to report quarterly earnings later this week.

Of the 112 companies in the S&P 500 that have reported earnings so far, 75.9% reported numbers above analyst expectations, according to data compiled by LSEG.

Meanwhile, shares of semiconductor firms and related equipment makers advanced after Dutch firm ASML reported fourth-quarter bookings of 7.09 billion euros ($7.39 billion), far exceeding expectations.

KLA Corp rose 1.5%, Applied Materials was up 1.3%, Lam Research gained 0.5% and Micron Technology added 1.1% in morning trading.

The Nasdaq jumped 2% in the previous session, while the S&P 500 rose close to 1%, as Nvidia and other artificial intelligence-linked tech shares recovered somewhat from the steep losses suffered earlier in the week, Reuters reported.

Markets have been on edge due to worries around US President Donald Trump's proposed tariffs, which could exacerbate inflationary pressures and slow rate cuts.

The December reading of the personal consumption expenditures price index, a crucial metric in assessing the inflation trajectory, is due on Friday.

Among earnings, T-Mobile added 7.4% after the company forecast stronger-than-expected annual subscriber growth driven by increased demand for its affordable premium 5G plans.

Danaher shed 7.7% after the life sciences company missed estimates for fourth-quarter profit, due to soft demand for tools and services used in drug development by its biotech and pharmaceutical clients.

Earnings from Magnificent 7 stocks Microsoft, Facebook-parent Meta and Tesla are expected after markets close.

Cybersecurity and cloud services company F5 jumped 5.1% after forecasting second-quarter revenue above estimates and posting a first-quarter revenue beat.

Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.29-to-1 ratio on the Nasdaq.

The S&P 500 posted 18 new 52-week highs and two new lows, while the Nasdaq Composite recorded 36 new highs and 52 new lows.