DeepSeek Faces Cyberattack, Sparks Global AI and Market Concerns

Chinese artificial intelligence startup DeepSeek, which has gained significant attention for its innovations, disclosed a major cyberattack that disrupted its services. The company, founded in 2023 and based in Hangzhou, announced that new user registrations were temporarily restricted following the attack.

DeepSeek's AI platform, known as R1, launched earlier this year and quickly became popular due to its free accessibility. On Monday, the application surged in downloads, becoming the most downloaded free app on both the Apple App Store and Google Play Store. The unexpected demand caused a temporary service outage lasting over an hour.

In response to the cyberattack, DeepSeek limited registrations to users with Chinese telephone numbers while maintaining uninterrupted service for existing users. The company described the attack as a "malicious attempt" but has not provided further details about its origin or impact.

The rapid rise of DeepSeek’s AI model has had significant ripple effects on global technology markets. On Monday, U.S.-based chipmaker Nvidia saw its shares drop by 17 per cent, wiping out approximately $593 billion in market value. Analysts attribute the decline to DeepSeek’s claim of developing advanced AI models using less sophisticated hardware, challenging Nvidia's dominance in the sector.

This marked one of the largest single-day losses in stock market history. Other major tech companies, including Microsoft and Meta, also experienced declines in share prices, signaling broader concerns over the competitive threat posed by emerging Chinese AI technologies.

Former U.S. President Donald Trump commented on DeepSeek’s rise, highlighting the need for America to remain competitive in the AI space. "China’s DeepSeek AI shows the potential of affordable innovation. The U.S. must prioritize cost-effective technological advancements instead of relying solely on high-cost solutions," Trump stated.

DeepSeek, founded by Liang Wenfeng, has quickly gained traction as a competitor to global AI platforms. Its R1 model features a user-friendly interface resembling popular AI chatbots like ChatGPT and is accessible through a website, mobile app, and API. The platform supports multiple languages, including regional languages like Telugu, and is identified by its dolphin logo.

Users can access DeepSeek by visiting its website, chat.deepseek.com, and registering with an email address. The platform’s intuitive design and multilingual capabilities have contributed to its rapid adoption.