Breakthrough Chinese AI firm gets breached by cyberattack

(MENAFN) Chinese AI startup DeepSeek experienced a significant cyberattack on its servers on Monday, coinciding with a global drop in tech stock values sparked by the company's groundbreaking AI technology. DeepSeek’s AI assistant, launched just last week, quickly surpassed US-based ChatGPT in popularity on the Apple App Store. The startup claims that its latest large language model is as powerful as its Western counterparts, but much more cost-effective to train and operate.

Following the attack, DeepSeek temporarily halted new user registrations to maintain service stability, while assuring existing users that they could still log in. The company also reported intermittent website outages, marking the most severe disruptions in the past three months. DeepSeek’s AI assistant, powered by its V3 and R1 models, has been praised for rivaling the most advanced global AI models.

The success of DeepSeek has raised questions about the effectiveness of US efforts to prevent China from obtaining advanced chips, with the startup revealing that it used Nvidia’s H800 chips, which were not subject to the US export ban, to train its AI model for under $6 million. Despite skepticism from some US experts, the news caused a massive market selloff. Nvidia’s stock suffered a historic loss of over $600 billion, with other companies like Oracle also seeing sharp declines. This led to a nearly 3% drop in the Nasdaq, impacting global stock exchanges including in Amsterdam and Tokyo.

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