The stocks in the United States on Monday crashed in a shocking reaction to China’s advanced DeepSeek AI technology that has left many surprised.
According to a report that appeared on CNN on Monday, DeepSeek, the Chinese AI firm that has been in operation for about one year, has produced an AI tool that has a ChatGPT-like AI model called R1. This AI model has all the familiar abilities and is operating at a fraction of the cost of OpenAI’s, Google’s or Meta’s popular AI models.
A related report on the BBC quoted researchers behind the artificial intelligence tool saying that they only spent USD6 million to build it, which is much less than the billions that were spent by AI companies in the US.
“DeepSeek is a Chinese artificial intelligence company founded in Hangzhou, a city in southeastern China. The company was launched in July 2023, but its popular AI assistant app was not released in the US until 10 January,” the BBC reported.
The BBC added that the DeepSeek AI chatbot which is available for download in Apple’s App Store and online at its website, has quickly become the top downloaded app on Apple’s store, and the most top-rated free application in the US on Apple’s app store.
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As the markets plunged, the BBC reports that Nvidia, a US-based company that makes the powerful chips that run AI, lost nearly $600bn in market value on Monday – the largest one-day drop for any company in US history – as its stock price plunged 17 percent over the course of the day.
“Nvidia began the day as the most valuable publicly traded stock on the market — over $3.4 trillion — after its shares more than doubled in each of the past two years. It ended the day in third place behind Apple and Microsoft,” the CNN added in a related report on DeepSeek.
