DeepSeek, a Chinese AI chatbot, has caused a stir in the technology market by offering a free, cost-effective alternative to leading US players. The emergence of this affordable chatbot raises questions about the future of AI development and the financial resources required for innovation.
A discount Chinese AI chatbot has sent shockwaves through the technology market , raising questions about the dominance of US companies. DeepSeek, a startup, launched a free assistant that claims to utilize less data and cost significantly less than industry giants like Nvidia and Oracle. This announcement triggered a sharp decline in the stocks of these companies, with some analysts predicting a potential $1 trillion sell-off in Wall Street tech stocks.
DeepSeek has surpassed its US rival, ChatGPT, in terms of Apple Store downloads, potentially signifying a shift in the financial resources required for AI development. Silicon Valley venture capitalist Marc Andreessen hailed DeepSeek as 'one of the most amazing and impressive breakthroughs I've ever seen — and as open source, a profound gift to the world'.While information about the small Hangzhou company behind DeepSeek remains limited, its researchers assert that they spent less than $6 million to train the chatbot. Jon Withaar, a senior portfolio manager at Pictet Asset Management, commented, 'We still don't know the details and nothing has been 100% confirmed in regards to the claims, but if there truly has been a breakthrough in the cost to train models from $100m-plus to this alleged $6m number, this is actually very positive for productivity and AI end users as cost is obviously much lower meaning lower cost of access.' The news has had a considerable impact on the global AI landscape. Nvidia, a dominant player in AI chip manufacturing, experienced an 11% drop in its early trading value, while Microsoft shares plummeted 3.8%. Meta Platforms followed suit with a 3.1% decline, and Google-owner Alphabet saw a 3.3% decrease. Despite these fluctuations, Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, cautioned against premature conclusions, stating that 'it was a bit premature' to assume the US would relinquish its AI supremacy
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