DeepSeek's impact on the AI market: what are they and what does it mean?

Now with regard to the global race for AI dominance the emergence of Chinese application DeepSeek has indeed been making tangible waves as it touts cost-efficiency while its rivals fear data security.

Our correspondent Moon Hye-ryeon reports.

DeepSeek a Chinese AI start-up is under global scrutiny after claiming its new "R1" model can rival ChatGPT at a fraction of the cost.

But concerns over excessive data collection and speculation of third-party access have sparked privacy fears.

"Collecting keystroke patterns to identify individuals doesn't necessarily mean a better service, so that's why it seems a bit excessive."

Reports of content censorship also raised questions about DeepSeek's AI chatbot failing to produce accurate information due to heavy reliance on China's official stance on certain subjects.

With doubts surrounding DeepSeek's development process, Microsoft and OpenAI launched a probe into suspected data exfiltration by individuals that could be linked to the Chinese firm.

Companies in non-AI-related sectors, such as those in South Korea, responded to data privacy concerns by restricting employee access to DeepSeek on work computers.

South Korea, Australia, and Japan's government ministries moved to do the same, while Italy has blocked the app from app stores altogether.

However, global investors indicated their anticipation for DeepSeek by wiping billions of dollars off Nvidia's market value – resulting in the biggest market cap loss ever for a U.S. company.

There are mixed views from experts and industry insiders on these reactions regarding whether this attention is warranted, with some saying that DeepSeek had the second-mover advantage.

"When you have an amazing solution coming from OpenAI, you know that it can be done. Then the question changes a little bit – shifts towards, "How can we do that in a more efficient way."

Amid DeepSeek dominating headlines, global leaders in AI gathered in Paris, where a statement signed by 60 countries listed priorities such as transparency, safety, and sustainability for future AI development – but the U.S. and the UK refused to sign it.

"The United States of America is the leader in AI, and our administration plans to keep it that way."

U.S. Vice President Vance shared the view that too many regulations can "kill" a developing industry such as AI as it takes off and stated the Trump administration's plans to take full "advantage" of its position in the market.

As the AI race between Washington and Beijing heightens and countries seek to establish regulations to keep them in check in an increasingly complex technological landscape, eyes are on how the balance of innovation with security will play out.

Moon Hye-ryeon, Arirang News.