Deep Seek AI, Key Features and Impact on India’s IT Dominance

Context: DeepSeek, a Chinese company, has shaken up the global tech industry and stock markets with its low-cost artificial intelligence (AI) model.

About Deep Seek AI

• DeepSeek AI is a Chinese artificial intelligence startup that has quickly gained prominence as a competitor to ChatGPT.
• It was founded by Liang Wenfeng in May 2023 and became widely popular in early 2025 with the release of its DeepSeek-R1 model.

Two Powerful AI Models

• DeepSeek-V3: Focuses on general-purpose tasks like answering questions, generating content, and coding.
• DeepSeek-R1: Excels in complex reasoning, logical problem-solving, and mathematical calculations.

List of Countries Who Banned DeepSeek

Here is a list of countries that have banned or restricted DeepSeek AI due to data privacy and security concerns:

Features of DeepSeek AI

Mixture-of-Experts (MoE) Architecture

• Unlike traditional AI models, MoE ensures that only a small portion of the model’s parameters are active at any time.
• This reduces computing power requirements while maintaining high efficiency.
• It also enables faster learning and improved performance over time.

Free to Use Without Limitations

• Unlike ChatGPT’s premium features, DeepSeek AI is completely free for regular users.
• No restrictions on daily usage, making it accessible to everyone.

Cost-Effective API Pricing

• DeepSeek AI offers significantly cheaper APIs compared to OpenAI’s ChatGPT, making it an attractive choice for developers.

Real-Time Web Search Capability

Users can search the web directly from DeepSeek AI to obtain real-time, updated information.

Impact of DeepSeek’s Innovation on India’s IT Dominance

Disruption of the Low-Cost IT Model

• India’s IT sector has historically thrived on an abundant supply of skilled, cost-effective labor.
• DeepSeek’s AI-driven automation reduces the need for human intervention, threatening India’s advantage in IT services.

AI Eliminating Skill and Language Barriers

• Generative AI models like DeepSeek’s can perform tasks traditionally outsourced to India, such as customer support, coding, and data analysis.
• This diminishes India’s edge in English proficiency and IT services.

India’s Lag in AI and R&D Investments

• DeepSeek’s breakthrough reflects China’s strong investment in AI and computational capabilities.
• India’s R&D expenditure remains below 1% of its GDP, far behind China’s 2.43%, impacting its ability to innovate.

Need to Move Beyond Labor-Led Growth

• Indian IT firms must shift from labor-intensive models to AI-powered solutions.
• Failing to adapt could lead to reduced global demand for India’s IT services.

Key Learnings from DeepSeek

• Prioritizing R&D as a Strategic Investment: DeepSeek’s success highlights the need for continuous AI research and innovation, even if it’s not the company’s core business. Indian IT firms must invest in long-term technological advancements.
• Utilizing Idle Capital for Innovation: Companies should channel surplus resources into AI and emerging tech research instead of solely focusing on workforce optimization.
• Encouraging Risk-Taking & Experimentation: DeepSeek treated AI as a secondary initiative yet achieved breakthrough success. Indian firms must foster a culture where experimentation and failure are seen as steps toward innovation.
• Building a Workforce that Works with AI, Not Against It: Instead of resisting AI, India must train its workforce to enhance productivity through AI tools and automation.
• Developing AI & Quantum Capabilities: India must aggressively invest in AI and quantum computing to stay competitive in the next wave of technological advancements.

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