Chinese Artificial Intelligence (AI) company DeepSeek has temporarily restricted user signups to those with mainland China telephone numbers following what it described as “large-scale malicious attacks” on its services. The move comes after the company’s AI assistant experienced a massive demand increase, catapulting the app to the top of Apple’s iPhone download charts and ranking it among the most downloaded apps on Google’s Play Store. While the popularity marks a notable milestone for the startup, it also exposed vulnerabilities in its infrastructure, resulting in its most extended reported service outage.
The AI assistant, powered by its proprietary R1 model, gained rapid traction due to its unique feature set, which includes transparent reasoning behind responses. This innovative approach has earned widespread praise on app stores, differentiating the assistant from competitors. However, the overwhelming demand strained the startup’s systems and prompted the company to limit signups, stating that only users with mainland China mobile numbers could register. The company has yet to clarify whether these restrictions are temporary or when they will be lifted.
Unprecedented growth fuels attention from tech giants and investors.
Meanwhile, DeepSeek’s rapid success has drawn attention from Investors and major Technology companies. Within one day, the app climbed to the top of app store charts, signalling a growing interest in its cost-efficient AI capabilities. The R1 model’s performance has also earned recognition on a UC Berkeley-affiliated AI leaderboard, further underscoring its potential. This rise has raised questions about the scalability and cost-efficiency of traditional AI development methods. The startup claims its AI model was developed at a fraction of the cost of competing systems, challenging the prevailing notion that advanced AI requires massive amounts of computing power and energy.
Despite its success, DeepSeek’s Infrastructure faced challenges during its rapid growth. The surge in demand caused prolonged service outages, with the company reporting issues with its API and other systems over the weekend. These outages were the longest since the startup began tracking its status, coinciding with the app’s meteoric popularity. While the company resolved one major service incident within an hour, the ongoing restrictions and system issues could erode user trust. However, existing users can still log in and use the service, but prospective customers face delays and limited access.
Market impact and investor concerns over AI spending.
In global technology markets, DeepSeek emergence has had a ripple effect, particularly as it claims to offer a high-performing AI model at a fraction of the cost of its competitors. These claims triggered a $1 trillion rout in US and European technology stocks, with investors questioning the Sustainability of AI spending by major tech giants. Concerns over bloated valuations and the long-term viability of current AI business models have led to a re-evaluation of the industry’s future. The company’s efficient development approach also raises questions about the effectiveness of US Trade sanctions on advanced technology. DeepSeek’s rapid ascent occurred despite restrictions on Nvidia chips.
While DeepSeek’s success has garnered international attention, its self-censorship on politically sensitive topics presents other challenges to its global ambitions. The company’s AI assistant avoids discussions on issues such as Tiananmen Square, President Xi Jinping, and Taiwan, raising concerns among international users. This self-censorship may limit the platform’s appeal in markets prioritising freedom of expression, potentially hindering its ability to compete with more open systems. On the other hand, restricting signups to new users further compounds these challenges.
Related Article: Africa’s first AI University in Nigeria
As for Nigeria, the restrictions have caused frustration among users eager to access AI assistant services. One Nigerian user shared their disappointment, explaining how they attempted to register after hearing about the app’s speed and accuracy. Despite multiple attempts, they could not sign up due to the ongoing technical issues and restrictions, even as of Tuesday morning. This highlights the growing demand for the platform beyond China and the barriers that the current limitations impose on its global user base. For now, its ability to adapt and evolve will determine whether it can establish itself as a lasting player in the industry.