DeepSeek has had to pause new user registrations as a result of the incident
Chinese AI startup DeepSeek reported a major attack on its servers on Monday, as global tech stocks shed hundreds of billions of dollars on the news of its potentially revolutionary technology.
DeepSeek’s AI assistant, released last week, has overtaken the US-based ChatGPT as the most popular program on the Apple App Store. The Chinese startup claims its latest large language model is as powerful as its Western competitors, but at a fraction of the cost to train and operate.
“Due to large-scale malicious attacks on DeepSeek’s services, we are temporarily limiting registrations to ensure continued service,” said a notice posted on the company’s website on Monday. “Existing users can log in as usual.”
The DeepSeek website has also suffered intermittent outages, the worst in the past 90 days, according to Reuters.
Powered by the DeepSeek V3 and R1 models, the AI assistant “rivals the most advanced closed-source models globally,” the company has said.
DeepSeek’s success has challenged the strategy of the previous US administration to block China from acquiring advanced chips from the US and the Netherlands. The company revealed last month that it used Nvidia’s H800 chips – not subject to the ban – for training its latest AI model, and spent less than $6 million in the process.
While some US experts have cast doubt on these claims, stock markets reacted with a bloodbath. Nvidia lost more than $600 billion in market capitalization in Monday’s trading, the largest such wipeout in history, according to Forbes. With Oracle’s shares also dropping, the losses dragged down the Nasdaq by almost 3%, while the S&P 500 was headed for its worst day in more than a month, according to AP.
The Amsterdam and Tokyo stock exchanges were brought down by the losses suffered by Dutch chipmaker ASML and Softbank, respectively. Just last week, the Japanese bank announced a partnership with Oracle and OpenAI that was supposed to invest up to $500 billion in AI infrastructure in the US.
