The rise of the Chinese AI app DeepSeek has caused a significant selloff in shares of major tech companies, including Nvidia, Microsoft, and Meta, following its ascent to the top of Apple’s App Store as the highest-rated free app. This development, which occurred on January 27, 2025, has raised concerns about the competitive landscape of AI technology, particularly as DeepSeek challenges the dominance of US firms.
- DeepSeek surpasses ChatGPT in app ratings.
- Major tech stocks decline after DeepSeek's rise.
- DeepSeek's development costs significantly lower.
- Chinese AI models require less computing power.
- DeepSeek compared to "AI's Sputnik moment."
- US chip restrictions impact Chinese AI growth.
DeepSeek’s rapid rise in popularity highlights a shift in the AI landscape, challenging the perception that the US is the unassailable leader in AI technology. Launched earlier this month, DeepSeek is powered by the open-source DeepSeek-V3 model, which its developers claim was created for under $6 million, a fraction of the billions spent by competitors. This has prompted discussions about the sustainability of investments in AI infrastructure by US companies.
Key facts about DeepSeek include:
- DeepSeek has overtaken ChatGPT in popularity on the App Store.
- Major tech companies like Nvidia and Microsoft experienced a decline in share prices following this News.
- The app’s development costs are significantly lower than those of its US counterparts.
Despite its success, analysts warn that challenges remain for Chinese AI firms, particularly in light of US restrictions on advanced chip technology exports to China. DeepSeek’s developers have reportedly found ways to innovate and share resources, resulting in models that require less computing power and are more cost-effective. However, experts caution that ongoing restrictions could hinder long-term growth and competitiveness in the global AI market.
The emergence of DeepSeek as a formidable player in the AI sector underscores the shifting dynamics of technology development. As it challenges established US firms, the market’s reaction indicates a growing concern over the viability and profitability of traditional AI investments.
