DeepSeek, a Chinese startup with an AI assistant that directly rivals OpenAI’s ChatGPT, raced to the top of Apple's iPhone download charts over the weekend, stirring doubts in Silicon Valley about America's lead in AI.

The app's underlying artificial intelligence model is widely seen as competitive with OpenAI and Meta Platforms's latest. Its claim that it cost much less to train and develop triggered share moves across Asia's supply chain.

Chinese tech firms linked to DeepSeek, such as Iflytek, surged on Monday, while chipmaking tool makers from Netherlands' ASML to Japan's Advantest Corp slumped on the potential threat to demand for Nvidia's AI accelerators.

US stock index futures also tumbled amid concerns that DeepSeek's AI models may disrupt US technological leadership.

Lauded by Silicon Valley based investor Marc Andreessen as "one of the most amazing and impressive breakthroughs," DeepSeek's assistant shows its work and reasoning as it addresses a user's written query or prompt.

Reviews on Apple's app store and on Alphabet.'s Android Play Store praised that transparency. The app topped the free downloads chart on iPhones in the US and is among the most downloaded productivity apps in the Play Store.

Founded by quantitive hedge fund chief Liang Wenfeng, DeepSeek's open-sourced AI model is spurring a rethink of the billions of dollars that companies have been spending to stay ahead in the AI race.

"While it remains to be seen if DeepSeek will prove to be a viable, cheaper alternative in the long term, initial worries are centered on whether US tech giants' pricing power is being threatened and if their massive AI spending needs re-evaluation," said Jun Rong Yeap of IG Asia.

Like all other Chinese-made AI models, DeepSeek self-censors on topics deemed politically sensitive in China. Unlike ChatGPT, DeepSeek deflects questions about Tiananmen Square, President Xi Jinping or the possibility of China invading Taiwan. That may prove jarring to international users, who may not have come into direct contact with Chinese chatbots earlier.

The initial success provides a counterpoint to expectations that the most advanced AI will require increasing amounts of computing power and energy an assumption that has driven shares in Nvidia and its suppliers to all-time highs.

The exact cost of development and energy consumption of DeepSeek are not fully documented, but the startup has presented figures that suggest its cost was only a fraction of OpenAI's latest models. That a small and efficient AI model emerged from China, which has been subject to escalating US trade sanctions on advanced Nvidia chips, is also challenging the effectiveness of such measures.

"The US is great at research and innovation and especially breakthrough, but China is better at engineering," computer scientist Kai-Fu Lee said earlier this month at the Asian Financial Forum in Hong Kong. "In this day and age, when you have limited compute power and money, you learn how to build things very efficiently."

What Bloomberg Intelligence Says China's strategic ambitions in AI should continue to pay off over the next 24 months, with the country set to further narrow the development gap with the US despite the semiconductor supply bottleneck. China's emerging prowess in AI is a testament to its inherent strength in software development, positioning the nation as the leading challenger to the US.

Reporting on:independent.ie