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CNBC's Inside India newsletter: How China’s DeepSeek could benefit India

This report is from this week's CNBC's "Inside India" newsletter which brings you timely, insightful news and market commentary on the emerging powerhouse and the big businesses behind its meteoric rise. Like what you see? You can subscribe  here.

This week, on my CNBC-issued three-year-old laptop, I ran a powerful artificial intelligence model known as DeepSeek-R1.

The new model, developed by the Chinese AI lab DeepSeek and released last week, sparked a massive fall in U.S. technology stocks. The highly competitive and potentially shockingly cost-effective AI model led investors to question the billions of dollars currently being spent by large technology companies.

While my brief foray into DeepSeek-R1 served only to satisfy my curiosity, millions of other people around the world are likely to have done the same with more productive goals in mind.

Among those experimenting with DeepSeek are likely to be Indian technology companies, which for the first time will be able to offer clients a powerful reasoning AI model, trained and hosted in-house, without relying on Big Tech firms.

China's DeepSeek released its model free for commercial use and also made public the technology know-how to build such a model from scratch. The company said it spent a mere $6 million in AI chip costs to develop the model.

Although some have raised questions about the exact figure, it compares to the hundreds of millions — and sometimes billions of dollars — spent by American technology firms.

The development could mark the start of AI model development within India, as previous methods for training large language models have required thousands of energy-intensive and expensive AI chips.

It could also mark a major turning point for Indian technology

Read more on cnbc.com
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