Chinese AI Chatbot DeepSeek Shakes US Tech Stocks

The sudden rise of DeepSeek, a low-cost AI chatbot from China, has shocked global tech markets. Launched recently by the Chinese company DeepSeek, the app has become the most downloaded free app in the U.S., beating competitors like ChatGPT, as reported by BBC.

DeepSeek’s affordability has raised serious concerns for U.S. tech giants like Nvidia, Microsoft, and Meta, which saw their stock prices drop sharply. Nvidia’s shares fell almost 17%, while Broadcom lost 17.4%. Major chipmakers in Europe, like ASML, also suffered losses, with its stock dropping over 7%, according to BBC.

DeepSeek operates on an open-source AI model, which the company claims cost just $6 million to develop—a fraction of the billions spent by U.S. AI companies. This disrupts the belief that creating advanced AI requires expensive infrastructure. Experts told BBC that this could change the entire AI market and impact profits for U.S.-based rivals, which have heavily invested in costly technology.

Marc Andreessen, a top venture capitalist and Trump advisor, described DeepSeek’s success as a “Sputnik moment” for AI, likening it to a major wake-up call, BBC noted. Meanwhile, Singapore-based tech advisor Vey-Sern Ling warned that DeepSeek could disrupt the whole AI supply chain if it continues growing.

The controversy also touches on geopolitics. DeepSeek founder Liang Wenfeng, who launched the company in 2023, is believed to have stockpiled Nvidia chips before U.S. export restrictions. He paired these with less advanced, cheaper chips still allowed in China, creating a low-cost AI model that competes globally.

Adding to the drama, DeepSeek recently faced cyberattacks, forcing the company to temporarily limit registrations. DeepSeek explained this in a statement, assuring current users they could still access the platform.

BBC highlighted that while DeepSeek raises questions about U.S. dominance in AI, analysts warn that Chinese companies still face challenges, including limited access to cutting-edge chips.

Despite this, DeepSeek’s low-cost strategy has shaken the industry and may spark significant changes in the global AI race.

Credit : BBC

https://www.bbc.com/news/articles/c0qw7z2v1pgo

Leave a Reply

Your email address will not be published. Required fields are marked *