DeepSeek announced that its newly popular app was targeted by a cyber-attack on Monday, forcing the Chinese company to temporarily restrict new registrations.
The attack followed the meteoric rise of the DeepSeek AI assistant app, which became the highest-rated free app in the US on Apple’s App Store and climbed significantly in Google’s Play Store rankings.
According to an update on its status page, DeepSeek began investigating the issue late Monday night Beijing time. After roughly two hours of monitoring, the company determined it had suffered a “large-scale malicious attack.”
While registrations were temporarily paused, existing users could continue accessing the app without interruption. DeepSeek has since resumed allowing new sign-ups.
DeepSeek’s app functions similarly to OpenAI’s ChatGPT chatbot. News of its rapid ascent in the US market—outpacing American rivals at a fraction of the cost—triggered a sharp downturn in technology stocks on Monday.
Nvidia, the AI chip manufacturer and the most valuable US company, saw its stock price plunge by 13.6% in early trading, wiping out approximately $500 billion in market capitalization.
Some investors were astonished at how DeepSeek managed to develop an AI assistant nearly on par with those from Google and OpenAI with an estimated budget of just $5 million.
Deepseek AI
This stands in stark contrast to other AI firms that have spent billions to achieve similar results, particularly given China’s strict chip export controls, which limit DeepSeek’s access to high-powered computational resources.
The company’s ability to succeed with limited funding has raised concerns about the US maintaining its dominance in the AI sector.
“DeepSeek R1 is AI’s Sputnik moment,” wrote investor Marc Andreessen on X. Echoing the Cold War-era reference, entrepreneur and politician Vivek Ramaswamy added: “Sputnik-like moments are a good thing. We don’t need to freak out, we just need to wake up.”
Ramaswamy, who is closely aligned with Donald Trump, has been vocal about the need for the US to remain competitive in AI innovation.
Last week, Trump announced a new $500 billion AI initiative called Stargate, a joint effort involving OpenAI, SoftBank, and Oracle. Promoting the venture, the president declared it would be “the future of technology” in the US.
However, the initiative faced immediate criticism from AI pioneer and Trump ally Elon Musk, who clashed with OpenAI CEO Sam Altman on X over the project’s actual funding capabilities.
Speaking at a House Republicans conference in Florida, Trump called DeepSeek’s rise a “wake-up call” for American tech companies, urging them to remain “laser-focused on competing to win.”
He also defended his decision to revoke Biden-era AI regulations via executive order, arguing that it would enable AI firms to “focus on being the best” rather than on meeting “woke” standards.
