In a post on X, ChatGPT's Sam Altman calls DeepSeek's latest offering "an impressive model, particularly around what they're able to deliver for the price".

But he emphasises that OpenAI believes greater computing power is key to the success of its own model.

He says: "We will obviously deliver much better models and also it's legit invigorating to have a new competitor! we will pull up some releases."

Altman made his fortune by investing in huge tech start-ups like Reddit and Airbnb, before turning his attention to artificial intelligence.

He created and still helms OpenAI's ChatGPT - a large language model that passed one million users in less than a week when it was launched in 2022.

DeepSeek claims in a technical report that its latest model, the Janus-Pro-7B, performs better on image generation than other tools by rivals OpenAI and StabilityAI.

The Chinese startup released the Janus upgrade as US tech stocks were reeling from the launch of its new AI assistant based on the DeepSeek-V3 model.

DeepSeek's AI-powered chatbot has become the most downloaded free app on Apple's store, following its January release in the US.

The company's advances in AI training and relatively small budget have raised questions about the multi-billion dollar investments being made into AI infrastructure.

In other tech news, President Trump has hinted that Microsoft is looking into buying TikTok's US operations and he added he would like to see a bidding war over the app.

Asked by reporters if Microsoft was in talks to buy the app, Trump paused and said: "I would say yes. A lot of interest in TikTok, great interest in TikTok."

It comes nearly a week after Trump signed an executive order granting TikTok a 75-day extension to comply with a law banning the app if it is not sold.

The social media platform briefly went dark in the US earlier this month after the Supreme Court denied a bid by its Chinese owner ByteDance to overturn the legislation.

The app came back online in the US shortly after with a short message thanking Trump for his "efforts".

Experts are describing DeepSeek's technological leap as an important milestone in the race to develop advanced AI systems.

"DeepSeek’s ability to rival US models despite limited access to advanced hardware demonstrates that software ingenuity and data efficiency can compensate for hardware constraints," says Marina Zhang, an associate professor at the University of Technology Sydney, who focuses on China's high-tech industries.

"Western observers often focus on China’s hardware limitations and US restrictions, underestimating the ingenuity and resilience of Chinese companies like DeepSeek."

Speaking at a Republican congressional retreat in Miami on Monday, US President Donald Trump warns DeepSeek should be a "wake-up call" to US tech firms.

His remarks come after DeepSeek's latest AI model sparked a rout in the stocks of some major US tech companies.

Shares in Japan fell on Tuesday after Wall Street saw a big drop in the values of major technology companies.

In morning trading, the benchmark Nikkei 225 was around 1.3% lower.

Shares in tech-focussed firms including Advantest, Softbank and Tokyo Electron fell sharply.

Hong Kong's Hang Seng index was up a little in early trading.

Several other markets in the region are closed for the Lunar New Year holiday.

Mainland China's financial markets will be shut from today and will reopen on 5 February.

Stock exchanges in Taiwan and South Korea, which both have major chip making firms, are also closed.

As we've been reporting, the launch of DeepSeek-R1 caused market turmoil in the US on Monday morning - including causing tech giant AI chipmaker Nvidia to drop $500 billion in stock price.

Founder of DeepSeek Liang Wenfeng had reportedly built up a store of Nvidia A100 chips which experts believe had led him to launch DeepSeek - by pairing the chips with cheaper ones.

In a statement, a Nvidia spokesperson called DeepSeek "an excellent AI advancement" as well as "a perfect example of Test Time Scaling".

"DeepSeek’s work illustrates how new models can be created using that technique, leveraging widely-available models and compute that is fully export control compliant," the statement adds.

"Inference requires significant numbers of NVIDIA GPUs and high-performance networking.

"We now have three scaling laws: pre-training and post-training, which continue, and new test-time scaling."

The US President Donald Trump says DeepSeek's technology is a wake-up call for the US technology industry, after news of the Chinese startup's latest AI model sparked a selloff in some US tech stocks.

"Hopefully, the release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win," Trump told a Republican congressional retreat in Miami.

The trading day has ended with the stocks of many US tech companies lowering in value after the emergence of a new, low-cost Chinese AI chatbot that has disrupted global markets.

Here is a quick recap of key developments:

• Chinese AI chatbot DeepSeek has shot up to becoming the most downloaded free app in the US after its launch last week, overtaking rivals like ChatGPT by American firm OpenAI
• DeepSeek's popularity has rattled markets, causing US tech giant Nvidia, which manufactures vital microchips needed to use and develop AI systems, to drop $500 billion (£400 billion) in stock price
• Other US tech giants, like Microsoft, Tesla, Google-owner Alphabet - and also saw their shares drop today
• The Chinese-made app has been hailed for its ability to process information in a way that is more cost-efficient, raising questions by investors about US dominance in AI
• The app, however, has hit some issues. It announced today it was temporarily halting new user registrations after it was hit with a "large-scale malicious attack"
• And our North America technology correspondent Lily Jamali has tested it, finding that it works in many ways similarly to other AI chatbots - but it also seems to censor answers questions relating to the 1989 massacre in Tiananmen Square in Beijing

We are ending our live coverage of DeepSeek for now, but you can stay up to date with our reporting below:

• Chinese AI chatbot DeepSeek sparks market turmoil
• Is China's AI tool DeepSeek as good as it seems?
• What is DeepSeek and why did it cause tech stocks to drop?

Image source, Getty Images

Let's step back and explain what artificial intelligence (AI) is and how it works.

AI essentially allows a computer to learn, solve problems and fulfil tasks almost like a person.

These programmes are trained by taking in huge amounts of information and learning to identify the patterns in it. The result is a computer that can have human-like conversations, for example, or predict a product that an online shopper might by.

AI has already been in use for some time. Voice-controlled virtual assistants Siri and Alexa utilise AI technology. Facebook and X have also been using the technology to decide which social media posts to show users.

It is also used by Amazon, where AI helps it analyse customers' buying habits and recommend future purchases.

Image source, Getty Images

Fiona Cincotta, a Senior Market Analyst at City Index, spoke to Radio 4's PM programme about the potential disruption DeepSeek could have on the sector.

"A tiny start up has created a more efficient AI model... this has raised serious questions about the need to spend billions on chips and other AI infrastructure".

"Fewer chips will be needed, less data will be needed, less power will be needed and and as result, we're just having this re-pricing of expectations and the concerns this latest development could disrupt this sector", she added.

This afternoon, David Sacks - Donald Trump's so-called crypto and artificial intelligence "tsar" - says the launch of DeepSeek-R1 indicates the AI race "will be very competitive".

In a post on X, he says the news today proves the president's efforts to roll back Biden-era technology and AI regulations was "right".

Last Thursday, the Trump signed an executive order "removing barriers to American leadership in Artificial Intelligence".

The 2025 order rescinds 2023's Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence executive order.

The order says it rolls back "certain existing AI policies and directives" that the Trump administration says "act as barriers".

According to Sacks, the Biden executive order "hamstrung American AI companies without asking whether China would do the same".

"I’m confident in the US but we can't be complacent," he adds.

It is now the end of the business day on Wall Street and the New York Stock Exchange has just closed on the day that Chinese-developed DeepSeek shot to prominence.

Here is where stock prices of several US tech giants stand at the close of markets:

1. Microsoft: 2.14% drop
2. Nvidia, the third-most valuable company in the US, behind Microsoft and Apple: 16.86% drop
3. Alphabet (Google): 4.03% drop
4. Tesla: 2.86% drop
5. Cisco Systems: 5.03% drop
6. Chipmaker Broadcom: 17.40% drop

Apple has slightly increased in value today, with Apple up 3.25%, while Meta is also up by 1.91%.

Lily Jamali
North America Technology Correspondent

DeepSeek has roiled US tech stocks. Shares of AI chip designer Nvidia alone were down more than 17% in midday trading.

"This is a pretty big flex for China. They're having a big negative impact on the US markets. It's a black eye for US tech," said Deepwater Management analyst Gene Munster.

Munster says there are many questions left unanswered about DeepSeek, including how the model got so good as cheaply and quickly as it did.

"This is impressive, but I feel like we're only getting two-thirds of the story," says Munster.

Despite the shock value, Munster thinks DeepSeek's sudden success will only accelerate the need for more hardware.

"If there's a model out there that runs more efficiently, I don't think that changes the desire for the companies that are buying all these chips. I don't think it changes their desire to continue to spend like they've been spending, because the end goal is speed," said Munster.

"It's about getting to artificial general intelligence fast."

Cristina Criddle writes about technology for the Financial Times and specialises in artificial intelligence and social media.

She told Radio 4's PM programme that since the DeepSeek app was released, it's been a hot topic in the AI world.

"What's it's managed to do is really catch up to the capabilities of some of the leading US models... DeepSeek has in a short amount of time, with relatively little attention, managed to catch up with them on quite a few capabilities like reasoning."

We've been bringing you the latest developments after the emergence of a new low-cost Chinese AI chatbot startled stock markets in Europe and the US:

• The popularity of new low-cost Chinese AI app has sparked market turmoil causing US tech giant Nvidia to drop $500 billion in stock price
• The DeepSeek app has overtaken rivals including ChatGPT to become the most downloaded free app in the United States

• Questions now being asked by investors about America's dominance in artificial intelligence
• Researchers claim that DeepSeek was developed for around $6m - significantly less than the billions spent by rivals - but this has been disputed by others in AI
• AI chipmaker Nvidia had plunged 16% midway through trading, while rival Broadcom had slumped 17.8%
• US tech giants including Microsoft and Meta all saw their share prices drop today

DeepSeek shifts the dial on the cost of lofty AI goalspublished at 19:34 Greenwich Mean Time 27 January

19:34 GMT 27 January

Marc Cieslak
AI correspondent

Image source, Getty Images

DeepSeek has upended the AI economic applecart. With reported development costs of just $6m, it’s shifted the dial on what many had thought was the cost of doing business in the age of AI.

The figures up to now have been eye-watering - Microsoft talked about an $80bn investment in AI, Meta plans to spend $60–65bn on AI infrastructure. Deepseek’s sudden rise suggests a lower-cost, open-source model can challenge that economic wisdom.

And it highlights the potential for cheaper, innovative solutions for those without the financial resources of the major US tech companies.

The UK government is betting big on AI as a driver for economic growth, as well as a means of cutting the cost of providing public services.

While there are still many questions surrounding Deepseek, the perception that the price of achieving lofty AI goals has shifted slightly and might not be as costly as first anticipated.

DeepSeek has been hailed for being low-cost compared to other AI chatbots.

It works by activating only the most relevant parts of its model for each query it receives, which saves money and computation power.

The model has been praised by some. Tech investor Marc Andreessen wrote on X shortly after the DeepSeek app's launch that it is "one of the most amazing and impressive breakthroughs" he has seen in open source AI, calling it "a profound gift to the world".

Aside from the way it processes data, DeepSeek appears to be relatively similar to other AI chatbots on the market, like ChatGPT, making it a legitimate rival to these applications.

Its emergence has upended Wall Street, and has raised questions in the US on whether Silicon Valley is overspending on tech advancements in the AI sector.

Image source, Getty Images

The emergence of the Chinese made AI-app DeepSeek comes on the heels of a major announcement by President Donald Trump to advance AI development in the US.

Last week, Trump unveiled Stargate - a $500bn AI venture that will be financed and carried out by three companies: OpenAI, SoftBank and Oracle.

The project is meant to accelerate AI development in the US, with Trump hailing it “the future of technology”.

Sam Altman of OpenAI called it “the most important project of this era”.

The money will be used to construct data centres in the US to support AI development. Those centres will be used by OpenAI to develop artificial intelligence technology that can be used in a wide range of sectors.

Tesla’s Elon Musk criticised the venture shortly after it was announced, writing on X that the three companies don’t have the money to fund the ambitious project.

Altman hit back at Musk, replying, “wrong, as you surely know".

Both Musk - who helped found OpenAI - and Altman had been embroiled in a public feud since Musk broke away from the company in 2018.

The BBC has spoken to Kayla Blomquist, a researcher at the Oxford Internet Institute and director of the Oxford China Policy Lab, to find out if there will be similar AI firms to DeepSeek emerging from China.

She says the AI business is a "vibrant ecosystem in China".

"I think we'll continue to see examples of this (AI firms) that pop up and catch everyone's attention and rightly so."

When asked how much involvement there is from China's government, Blomquist says officials have been hands-off and allow things to develop organically.

“I would say there's a shift as we've seen an announcement in huge investment from the central government just in the last week. And so that is probably going to signal a change moving forward.”