A new open-source Chinese chatbot called DeepSeek has taken the tech world by storm, surpassing popular AI models like ChatGPT in efficiency and accessibility. Its low-cost operation and open-source nature have sparked concerns among investors about the future of AI companies that rely on expensive computing resources. The unexpected success of DeepSeek has triggered a significant drop in stock prices, particularly affecting NVIDIA, Microsoft, and Meta.
The tech world is abuzz after the launch of DeepSeek, a low-cost Chinese chatbot that has quickly climbed to the top of Apple's free app charts in both the UK and the US. Unlike proprietary AI models like Gemini and ChatGPT, DeepSeek is open-source, meaning anyone can access, study, and build upon its code.
What's more, it reportedly requires significantly less computing power to operate, potentially disrupting the profit margins of established AI companies that have heavily invested in this technology. This unexpected development sent shockwaves through the stock market, with Nvidia, the world's most valuable publicly traded company, facing a potential loss of over $300 billion in market value, according to the Financial Times. This would be the biggest single-day drop for any company in history. Other American AI-related firms like Microsoft and Meta also experienced significant declines, with over a trillion dollars wiped off the Nasdaq stock exchange. Investors are worried that their bets on companies like Nvidia, which produces computer chips essential for AI processing, may become less profitable if comparable performance can be achieved with significantly less computing power. Marc Andreessen, a venture capitalist and Trump advisor, likened DeepSeek's launch to the Soviet Union's Sputnik moment, highlighting its potential to spark a new era of innovation and competition in the AI field. He called it 'one of the most amazing and impressive breakthroughs I've ever seen.' Web3 entrepreneur Jeffrey Emanuel echoed these sentiments, suggesting that the entire industry might have been overinvesting in computing resources, estimating that DeepSeek is nearly 50 times more compute-efficient than popular American models during training. DeepSeek's creators claim to have trained DeepSeek-V3 with less than $6 million, a fraction of the vast sums poured into leading AI companies. This achievement is particularly remarkable considering previous assumptions that China lagged behind in the AI race due to restrictions on exporting the advanced chips required for powerful AI models. These restrictions, implemented by the Biden administration in 2021 to protect American technological dominance, may have inadvertently spurred Chinese AI firms to collaborate and find innovative solutions. While DeepSeek's open-source nature is touted as a major advantage, some experts caution that it still lacks complete transparency. Dr. Sukant Khurana, an AI and medicine specialist, emphasizes that 'open weights' do not necessarily equate to 'open-source,' as data regarding its training process remains inaccessible. He believes that DeepSeek's approach, while a step forward in terms of accessibility, falls short of the transparency some may mistakenly perceive it to offer.Despite the limited information available about the company behind DeepSeek, a small Hangzhou-based startup founded in 2023, its emergence has undeniably shaken the status quo in the AI landscape. Whether it can sustain its momentum and become a truly dominant force remains to be seen, but its impact is already being felt across the tech industry
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