DeepSeek, a fast-rising Chinese AI startup, announced on Monday that it would temporarily limit new user registrations after facing a cyberattack. The attack comes on the heels of the company’s AI assistant skyrocketing to the top of Apple’s App Store charts in the United States.
The startup also dealt with website outages earlier the same day, leaving many users unable to access their accounts. According to DeepSeek’s status page, the disruptions were resolved, but the company confirmed it was the longest outage it had faced in three months.
DeepSeek’s sudden rise in popularity stems from its newly launched AI assistant, powered by the DeepSeek-V3 model. Released on January 10, the app has been praised for its efficiency, using less data and costing significantly less to operate compared to models from established players. “This could be a turning point in AI development,” DeepSeek noted in a statement, emphasizing that their model delivers advanced capabilities while remaining cost-effective.
Sensor Tower, an app data research firm, reported a surge in U.S. downloads following the release of the assistant. The milestone has challenged long-standing perceptions about the dominance of American AI firms.
DeepSeek’s achievements have resonated across the tech world, especially in Silicon Valley. Industry experts have highlighted the company’s ability to develop a leading AI model despite U.S. export restrictions aimed at limiting China’s access to advanced chips and AI technologies.
Since 2021, the Biden administration has tightened restrictions on exporting high-performance chips, such as Nvidia’s H100, to Chinese firms. However, DeepSeek revealed in a recent paper that its DeepSeek-V3 model was trained using Nvidia’s H800 chips—less advanced versions of the H100—at a cost of under $6 million.
While some have questioned the validity of these claims, the relatively modest expenditure has led U.S. tech executives to reconsider the effectiveness of export controls. A U.S.-based AI analyst noted, “If DeepSeek can achieve these results with less powerful chips and limited funding, it highlights the innovative potential of Chinese startups in navigating these restrictions.”
The cyberattack and subsequent website outages coincide with DeepSeek’s growing prominence in the AI sector. The company described the attack as “a targeted effort to disrupt services during a pivotal moment,” but assured users that their data remains secure.
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DeepSeek’s open-source approach, combined with its focus on cost-effective solutions, has gained it goodwill within the global AI community. However, its rapid ascent has also attracted significant scrutiny, particularly in the U.S., where concerns about China’s technological advancements remain a heated topic.
DeepSeek’s emergence is part of a broader trend in the Chinese tech industry. Since 2023, when Baidu introduced the first Chinese large-language AI model, dozens of Chinese companies have entered the field. However, DeepSeek is the first to gain significant recognition from U.S. tech leaders, with some even suggesting it rivals or surpasses the performance of cutting-edge American models.
A U.S.-based AI researcher said, “This is a wake-up call for the industry. DeepSeek has shown that innovation isn’t solely dependent on having the most advanced hardware—it’s about finding smarter ways to use the resources you have.”