A shocking Chinese AI advancement called DeepSeek is sending US stocks plunging
CNN
US stocks were set for a steep selloff Monday morning after a surprise advancement from a Chinese artificial intelligence company, DeepSeek, threatened the aura of invincibility surrounding America’s technology industry.
US stocks were set for a steep selloff Monday morning after a surprise advancement from a Chinese artificial intelligence company, DeepSeek, threatened the aura of invincibility surrounding America’s technology industry. DeepSeek, a one-year-old startup, last week showed off a stunning capability: It presented a ChatGPT-like AI model called R1, which has all the familiar abilities, operating at a fraction of the cost of OpenAI’s, Google’s or Meta’s popular AI models. The company said it had spent just $5.6 million training its newest AI model, compared with the hundreds of millions or billions of dollars US companies spend on their AI technologies. That sent shockwaves through the tech sector Monday. Meta last week said it would spend upward of $65 billion this year on AI development. Sam Altman, CEO of OpenAI, last year said the AI industry would need trillions of dollars in investment to support the development of in-demand chips needed to power the electricity-hungry data centers that run the sector’s complex models. Mark Andreesen, a Trump supporter and one of the world’s leading tech investors, called DeepSeek “one of the most amazing and impressive breakthroughs I’ve ever seen,” in a post on X. The stunning achievement from a relatively unknown AI startup becomes even more shocking when considering that the United States for years has worked to restrict the supply of high-power AI chips to China, citing national security concerns. That means DeepSeek was able to achieve its low-cost model on under-powered AI chips. US tech stocks got hammered Monday morning. Nvidia (NVDA), the leading supplier of AI chips, whose stock more than doubled in each of the past two years, fell 12% in premarket trading. Meta (META) and Alphabet (GOOGL), Google’s parent company, were also down sharply, as were Marvell, Broadcom, Palantir, Oracle and many other tech giants.
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