Just 48 hours ago, very few people had even heard of DeepSeek, and fewer still knew what it was. But now it is headline news across the world and causing turmoil in the tech sector and elsewhere.
The Chinese-made AI chatbot is shaking up financial markets, disrupting the tech sector, and causing conniptions among established players who are scrambling to figure out what its arrival means.
Much the same as OpenAI’s ChatGPT, it utilizes advanced natural language processing to perform tasks like coding, mathematics, and conversational assistance.
So, nothing new. But why is everyone getting the vapours about it? Well, if you’re an Nvidia shareholder, director or employee it might be because just hours after DeepSeek’s release, the chipmaking giant saw $600 billion wiped off its market value in a single day - the biggest one-day loss in US history.
The Nasdaq dropped over 3% and the entire tech sector was sent into a panic. Why? Because DeepSeek, built at a fraction of the cost of its rivals, challenges the assumption that high-end chips and massive budgets are the only way to lead in the AI sector.
Low cost AI innovation
DeepSeek is similar to ChatGPT, but what makes it different is its cost-efficiency. Its creators claim they trained the model using a mix of banned high-end Nvidia chips and cheaper, less advanced ones. That kind of low-cost innovation disrupts the current AI industry model, which relies on expensive chips and infrastructure.
Donald Trump, who originally mooted a ban for the Chinese-owned TikTok, before he framed himself as its rescuer, was surprisingly positive about it.
AI in Hiring: Trends, Insights and Predictions
As AI revolutionizes the recruitment life cycle at warp speed, HR leaders must stay informed about AI’s advantages and its current shortcomings.
How can we adopt these tools to stay competitive and efficient while retaining the human touch that remains critical to optimizing candidate experience, making informed decisions, and, ultimately, building strong teams and cultures?
That is our industry’s biggest challenge as we navigate this new terrain. We hope these insights, tips, and predictions will help drive innovation and excellence in your hiring practice.
“If you could do it cheaper, if you could do it [for] less [and] get to the same end result. I think that's a good thing for us,” he said.
There’s a high degree of likelihood that he may not have appreciated some of the detail in the situation, but for now he is positive about it.
It has proven that cutting-edge AI doesn’t have to cost billions to develop and doesn’t need huge investment in chips, which is why the value of the world’s biggest chip manufacturer took a sudden nose dive.
Challenge to the ‘Mag Seven’
The potential implications of DeepSeek are massive. It’s a technological breakthrough that demonstrates China’s ability to innovate rather than follow, and it’s a direct challenge to the dominance of American AI giants like OpenAI, Meta, and Microsoft.
An increase in cost-efficient AI models like DeepSeek could reshape the tech market completely. If the cost of AI development is lowered so significantly, companies will no longer need massive teams of engineers or expensive data centers. Job cuts could follow in areas like chip manufacturing, software engineering, and AI infrastructure management. For HR departments, this means preparing for workforce adjustments, retraining programs, and managing yet more layoffs.
That said, cheaper AI development might yet mean opportunities in smaller firms or startups that previously couldn’t afford to compete in the space. HR departments in those companies would need to shift gears, focusing on hiring talent skilled in deploying and managing AI models.
DeepSeek’s rise also presents a challenge to the so-called “broligarchs” - influential tech leaders like Elon Musk (X), Mark Zuckerberg (Meta), and Sam Altman (OpenAI) - who’ve dominated the AI conversation and built themselves a platform to influence conversations around politics and culture using their social media brands.
“This could be the pin that pops the Mag Seven bubble,” said one tech sector CEO, referring to the seven traditionally high-performing and most influential stocks in the tech sector - namely Apple, Alphabet (Google); Amazon, Meta, Microsoft, Nvidia and Tesla.
If DeepSeek disrupts the market and breaks their monopoly on AI and large-scale computing projects, people might start to care a lot less about what they think about DEI or working from home for instance.
Democratizing AI
In addition, if DeepSeek’s cost efficiencies push governments to reconsider their AI strategies, it could lead to new regulations, trade policies, and even cultural shifts around AI use and development. Changes that will likely trickle down into employment policies and workplace practices, which HR departments will need to adapt to.
Lower costs and greater accessibility to AI could democratize the industry, enabling smaller companies to adopt AI tools and innovate, creating new markets, more jobs, entire industries and new careers centred around AI.
DeepSeek is a wake-up call, not just for tech companies, but for HR departments across industries. Whether it leads to job cuts, job creation, or a mix of both, HR professionals will need to be proactive. They’ll have to navigate workforce shifts, adopt new technologies, maybe new legislation and stay ahead of policy changes influenced by the evolving tech landscape.
In short, DeepSeek isn’t just a Chinese AI chatbot - it’s a potential game-changer on a number of levels. And while it is too early to predict its full impact, one thing is clear, if it paves the way for cheaper AI based technology, it will redefine not just the tech world, but the way we work, hire, and innovate in the years to come.