The Chinese startup claims to have trained high-performing AI models cost-effectively, without relying on the most advanced chips.
U.S. tech stocks fell sharply on Monday as the rising prominence of Chinese AI startup DeepSeek sparked investor concerns about the future of American leadership in the sector.
The Nasdaq Composite, dominated by technology companies, dropped over 2.6% in early trading. Meanwhile, the Dow Jones Industrial Average declined by more than 100 points, and the S&P 500 fell over 1.5%.
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DeepSeek has been making waves in Silicon Valley, as the startup reportedly delivers chatbot capabilities comparable to OpenAI's ChatGPT but at a significantly lower development cost.
DeepSeek has quickly gained global traction since its release earlier this month, with 1.6 million downloads in the U.S. by January 25. It now ranks as the No. 1 app in iPhone app stores across Australia, Canada, China, Singapore, the U.S., and the U.K. Unlike major competitors like ChatGPT, DeepSeek is open-source, enabling developers to enhance the software with their own innovations.
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On January 20, the company introduced R1, a specialized AI model tailored for complex problem-solving. According to the Wall Street Journal, R1 "rocketed to the global top 10 in performance" while being developed far more quickly and cost-effectively than comparable U.S. models, using fewer and less powerful AI chips.
Meta's Chief AI Scientist, Yann LeCun, highlighted the app’s rapid rise and impact on social media, emphasizing its growing influence in the AI landscape.
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