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What happens when a company like OpenAI invests over $100 million to develop and launch ChatGPT, only to find out another company has accomplished the same thing at a fraction of the cost? Most people would shrug their shoulders and say that’s competition.

DeepSeek-R1, an AI model developed by the Chinese company, DeepSeek, is making headlines for performance that is comparable to ChatGPT but developed at a fraction of the investment cost.

Dr. Sean Yang, professor of information technology at Georgia Gwinnett College (GGC), said that ChatGPT was built using high-end Graphics Processing Units (GPU). This hardware allows systems to process large amounts of data at a much higher rate, which is critical for AI.

“This achievement raises concerns within the U.S. industry as most other leading AI models, such as Gemini by Google and Llama by Meta, closely resemble ChatGPT in their development and resource requirements,” said Yang.

DeepSeek's success, he added, demonstrates that effective AI development can be achieved even under constraints, highlighting the potential of China's progress in this field despite international sanctions.

“It also challenges the perception that AI models can only be developed using the high-end GPUs,” said Yang.
That led to impacts in the stock market. For example, NVIDIA, which produces high-end GPUs, saw its stock prices drop.

DeepSeek’s success has raised privacy concerns.

“There is no concrete evidence that DeepSeek has collected data that could compromise privacy by transmitting sensitive data to foreign entities,” said Yang. “DeepSeek-R1, like ChatGPT, is a large language model capable of reacting to prompts and generating various types of content.”

The race for superiority in AI is similar to the Space Race of the 1960s between the U.S. and Russia. The U.S. wanted to be the first country to put a man on the moon, a goal achieved in 1969.

“Since AI has become a measurement of national power, people are worried about the progress that China made even under the sanctions,” said Yang.

Recently, the Trump administration is urging companies like SoftBank, OpenAI and Oracle to invest $500 billion in U.S.-based AI research and development.