DeepSeek Crypto Hit by Cyber Attack as Growth Skyrockets

By / / Crypto News, Daily News
DeepSeek Crypto Hit by Cyber Attack as Growth Skyrockets
Table Of Contents
  1. Cyberattack on DeepSeek's AI Assistant Amid Explosive Growth
  2. System Outages and Recovery
  3. DeepSeek's Rise to the Top
  4. Global AI Dominance by DeepSeek
  5. Crypto Market Crash
  6. What is DeepSeek?

Cyberattack on DeepSeek’s AI Assistant Amid Explosive Growth

DeepSeek, a Chinese startup based in Hangzhou, was hit with a massive cyberattack following its phenomenal rise to popularity. On Monday, DeepSeek announced that it was temporarily stopping new user registrations to resolve outages caused by the attack.

This announcement came just a day after the company’s AI assistant became the top-rated free app on Apple’s App Store in the United States, surpassing OpenAI’s ChatGPT.

System Outages and Recovery

The attack crippled DeepSeek’s API and login services, leading to the company’s longest outage in over 90 days. By Monday evening, DeepSeek reported that it had resolved most technical issues.

However, the inability to onboard new users during this critical period underscores the challenges of rapid scalability in the face of cyber threats.

DeepSeek’s Rise to the Top

DeepSeek’s AI assistant, fueled by its DeepSeek-V3 model, launched on January 10, 2025. It gained immense attention from U.S. users at an unprecedented pace.

With its low-cost, high-efficiency design, the assistant demonstrated the potential to challenge top closed-source systems such as OpenAI, marking a new beginning for generative AI technology.

Success of AI Assistant Shook the Tech World:

  • U.S. shares of AI-linked tech giants fell as investors realized DeepSeek posed a real threat to the competition.
  • DeepSeek achieved cutting-edge performance at a development cost of under $6 million.
  • Chinese AI firms showcased new ways to innovate, setting a benchmark for performance at minimal costs.

Global AI Dominance by DeepSeek

DeepSeek’s success is seen as a blow to U.S. dominance in the AI space. While competitors relied on cutting-edge chips, DeepSeek used Nvidia H800 chips, which are less powerful but efficient enough for the model’s training.

This allowed the company to circumvent U.S. export controls while staying competitive in performance.

Its rapid growth has reignited discussions about export controls and the global race for AI supremacy, highlighting how China leverages cheap innovation to close the gap with Silicon Valley.

Crypto Market Crash

The cyberattack on DeepSeek sent shockwaves through the crypto market, causing a major crash. Investor confidence wavered as fears of broader vulnerabilities in the tech and crypto sectors emerged.

What is DeepSeek?

Founded in 2023 in Hangzhou, DeepSeek is a disruptive AI startup known for its large-language models. It stands as a challenging competitor to U.S.-based giants such as OpenAI, integrating top-notch innovation with low-cost strategies.

DeepSeek is poised to play a crucial role in shaping the future of AI on the global stage. With its potential to challenge established players, the cyberattack and its subsequent rapid growth demonstrate that it is ready to lead the next wave of technological innovation.

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