Chinese AI Chatbot DeepSeek Hit with Major Cyberattack

A low-cost chatbot built by Chinese AI company DeepSeek announced Monday that it would temporarily limit user registrations due to malicious attacks on its services.

The DeepSeek app, launched last week, has overtaken competitors, including OpenAI’s ChatGPT, to become the most downloaded free app in the United States.

Shortly after US markets opened on Monday, DeepSeek said it was hit with a “large-scale malicious attack” as users flocked to the Chinese AI startup.

DeepSeek, however, said existing users would be able to log in as usual.

Powered by the open-source DeepSeek-V3 model, the app was reportedly developed for less than $6 million – significantly less than the billions spent by competitors.

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This, the creators said, was made possible by using existing technology and open-source code that can be used, modified, or distributed by anyone free of charge.

Although disputed by other players in the AI space, the ability of a Chinese startup to create a low-cost chatbot raises questions about America’s AI dominance and future US investments.

ASML, the Dutch chip equipment maker, saw its share price fall by more than 10% on Monday, while shares in Siemens Energy, which makes AI-related hardware, dropped by 21%.

“This idea of a low-cost Chinese version hasn’t necessarily been forefront, so it’s taken the market a little bit by surprise,” said Fiona Cincotta, senior market analyst at City Index.

“So, if you suddenly get this low-cost AI model, then that’s going to raise concerns over the profits of rivals, particularly given the amount that they’ve already invested.”

Singapore-based technology equity advisor Vey-Sern Ling told the BBC the new development could “potentially derail the investment case for the entire AI supply chain”.