A powerful new open-source artificial intelligence (AI) model created by Chinese startup DeepSeek has shaken Silicon Valley over the past few days. Packed with cutting-edge capabilities and developed on a seemingly tiny budget, DeepSeek’s R1 is prompting talk of an impending upheaval in the tech industry.
To some people, DeepSeek’s rise signals that the US has lost its edge in AI. But a number of experts, including executives at companies that build and customize some of the world’s most powerful frontier AI models, say it's a sign of a different kind of technological transition underway.
Instead of trying to create larger and larger models that require increasingly exorbitant amounts of computing resources, AI companies are now focusing more on developing advanced capabilities, like reasoning. That has created an opening for smaller, innovative startups such as DeepSeek that haven’t received billions of dollars in outside investment.
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