Key TakeawaysDeepSeek, a Chinese AI app, temporarily halted new user sign-ups due to large-scale cyberattacks. Existing users remained unaffected during this period.It recently surpassed ChatGPT to become the most downloaded free app on the U.S. Apple App Store.The success of DeepSeek has led to significant disruptions in the global tech industry, raising questions about the necessity of large investments in AI infrastructure.On Monday, 27th January 2025, the newest strong rival of AI models, DeepSeek, temporarily stopped taking new user registrations due to large-scale cyber attacks. While existing users could still log in and use the app, new users were left waiting for the next update on these malicious activities to use the newly popular AI assistant.On Monday, the status page said that an investigation is being conducted to identify the issue. After about two hours of monitoring, the company concluded that it was a victim of large-scale malicious attacks and limited registrations.The app is now allowing registrations again, indicating that the issue mustve been resolved. However, theres a note on the page that says, Registration may be busy. Please wait and try again. so its possible that logins might be slow.The Chinese AI app recently dethroned ChatGPT to become the most downloaded free app in the US Apple App Store.The company has been in the spotlight since then, leaving tech analysts, investors, and developers in shock with its generative AI systems and the advanced technology that it has been using.The fact that DeepSeek is developed at a fraction of the cost of its rivals makes it a shocking and extraordinary development in AI. Jefferies analysts estimate the R1 models training cost at only $5.6 million, which is far less than competitors models like ChatGPT 4, which cost more than $100 million to develop.The success of this company puts a question mark on whether the gigantic funding rounds and exceptionally high valuations for AI are really justified.The Rapid Rise of DeepSeekFounded in 2023 by a Chinese hedge fund high flyer Liang Wennfeng, DeepSeek is a free AI tool like Gemini or ChatGPT that provides structured explanations and step-by-step problem-solving methods.The R1 model sent shockwaves through the AI industry quickly after its release, becoming a hot favorite among the masses for its impressive performance and reasoning capabilities. This R1 is a so-called reasoning model, which is a tweaked version of the V3 with a technique called reinforcement learning.Several reviews highlight that while ChatGPT is great for creative content, DeepSeek is better at problem-solving and mathematical reasoning than most AI tools in the market today.DeepSeek R1 is AIs Sputnik moment, the investor Marc Andreessen wrote on XTrump said the emergence of DeepSeek should be a wake-up call for US companies, as he announced a new $500B AI infrastructure project called Stargate last week. The venture will be taken forward in collaboration with OpenAI, Softbank, and Oracle, and Trump apparently has a lot of expectations from this.Itll be interesting to see how the biggest investment ever in the field of AI competes with this Chinese AI app, Deepsake.Add Techreport to Your Google News Feed Get the latest updates, trends, and insights delivered straight to your fingertips. Subscribe now! Subscribe now Vlad is Tech Report's Executive Editor. With over a decade of experience in tech content, he's passionate about computer hardware, an advocate of online privacy, and strongly believes in the open-source, scarce-money nature of cryptocurrency.When hes not working, hes traveling with his partner and their cat, learning Python, or reading good books. He never owned a PC he did not build. View all articles by Vlad Melnic Our editorial processThe Tech Reporteditorial policyis centered on providing helpful, accurate content that offers real value to our readers. We only work with experienced writers who have specific knowledge in the topics they cover, including latest developments in technology, online privacy, cryptocurrencies, software, and more. Our editorial policy ensures that each topic is researched and curated by our in-house editors. We maintain rigorous journalistic standards, and every article is 100% written byreal authors.