Chinese AI startup DeepSeek has recently gained significant traction, becoming the top-rated free application on Apple's App Store in the United States. However, this surge in popularity has been marred by a cyberattack that forced the company to limit new user registrations and caused widespread service outages.
Key Takeaways
DeepSeek's AI assistant has overtaken ChatGPT in popularity, leading to a surge in user registrations.
The company faced a cyberattack that resulted in temporary registration limits and service outages.
DeepSeek's innovative AI model is noted for its lower training costs compared to competitors.
DeepSeek's Rise to Prominence
DeepSeek, a startup founded in 2023, has quickly made a name for itself in the competitive AI landscape. Its flagship AI model, DeepSeek-V3, has been praised for its performance, rivaling established players like OpenAI's ChatGPT. The application, launched on January 10, has attracted a large user base, particularly in the U.S., where it has become the top free app on the Apple App Store.
The rapid ascent of DeepSeek has raised eyebrows in Silicon Valley, challenging the notion of U.S. dominance in AI technology. The startup claims to have developed a model that uses significantly less data and incurs lower costs than its competitors, potentially reshaping the investment landscape in AI.
Cyberattack Disrupts Services
On January 27, 2025, DeepSeek announced that it would temporarily limit new user registrations due to a large-scale cyberattack. The company reported outages on its website and issues with its application programming interface (API), marking the longest service disruption in approximately 90 days.
To mitigate the impact of the attack, DeepSeek restricted new registrations to users with China-based phone numbers. Existing users were still able to log in, but the company acknowledged that service might be busy due to the ongoing issues.
Implications for the AI Market
The cyberattack on DeepSeek comes at a time when the company is challenging established AI giants like Nvidia and Oracle. The attack has led to a sell-off in technology stocks, with Nvidia's shares dropping significantly as investors reacted to the potential threat posed by DeepSeek's low-cost AI solutions.
DeepSeek's ability to train its models using less powerful chips, while still achieving competitive performance, has raised questions about the effectiveness of U.S. export controls on advanced technology. The Biden administration has implemented restrictions aimed at preventing the export of high-performance chips to China, yet DeepSeek's success suggests that these measures may not be as effective as intended.
The Future of DeepSeek
As DeepSeek navigates the aftermath of the cyberattack, its future remains uncertain. The company has garnered significant attention for its innovative approach to AI, but the recent disruptions could impact its growth trajectory. Industry experts will be closely monitoring how DeepSeek responds to these challenges and whether it can maintain its momentum in the competitive AI landscape.
While DeepSeek's rise has been meteoric, the recent cyberattack serves as a reminder of the vulnerabilities that even the most promising startups face in today's digital landscape. The outcome of this situation could have lasting implications for the company and the broader AI market.
Cybersecurity has never been more critical. At BetterWorld Technology, we empower businesses with advanced solutions to combat emerging threats while driving innovation. Protect your organization with confidence—contact us today to schedule a consultation and secure your company’s future.
Sources
DeepSeek hit by cyberattack as users flock to Chinese AI startup | Reuters, Reuters.
DeepSeek limits registrations due to cyber attack | Reuters, Reuters.
DeepSeek temporarily limited new sign-ups, citing 'large-scale malicious attacks', Business Insider.