DeepSeek, a Chinese-made artificial intelligence (AI) model, has skyrocketed to the top of the Apple Store’s download charts, surprising investors and contributing to a sharp decline in some tech stocks.
Released on January 20, the latest version of DeepSeek quickly impressed AI experts and soon caught the attention of the broader tech industry and global audience.
Former US President Donald Trump called it a “wake-up call” for US companies, urging them to refocus on “competing to win.”
What makes DeepSeek unique is its claim to have been developed at a fraction of the cost of leading AI models like OpenAI’s, thanks to using few advanced chips.
This innovation has led to a dramatic $600 billion loss in Nvidia’s market value, marking the largest one-day loss in US stock market history.
DeepSeek’s success also raises questions about the effectiveness of Washington’s efforts to curb China’s technological rise, especially with its ban on exporting advanced chips to China.
In response, China has intensified its focus on technology, with President Xi Jinping declaring AI a national priority. Start-ups like DeepSeek are crucial to China’s shift from traditional manufacturing to advanced technologies, including chips, electric vehicles, and AI.
How US Companies like Nvidia Are Impacted by DeepSeek?
DeepSeek’s success challenges the notion that AI needs big budgets and high-end chips. Its ability to create advanced AI with fewer resources has raised doubts about the future of high-performance chips. OpenAI, valued at $157 billion, is now under scrutiny for its high costs and lack of significant returns. DeepSeek’s low costs caused a market drop on January 27, with Nvidia’s stock falling 17% and its market value shrinking. As a privately owned company, DeepSeek’s shares are not available on public stock exchanges.
