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US Tech stocks tank as Chinese DeepSeek threatens AI industry

US Tech stocks tank as Chinese DeepSeek threatens AI industry

Wall Street is reeling as Chinese AI disruptor DeepSeek shakes up the tech industry, sparking a sell-off in Big Tech stocks. On Monday, the S&P 500 dropped 1.5%, with Nvidia plunging nearly 17%, dragging the Nasdaq down 3.1%. Meanwhile, the Dow Jones rose 0.7% as non-AI-related sectors held firm.

DeepSeek, developed by a Hangzhou-based research lab, has unveiled two groundbreaking models: the V3, a 671-billion parameter “mixture of experts,” and the R1, an advanced reasoning model. These models boast cost efficiency and performance that challenge US giants like OpenAI and Google. Notably, DeepSeek V3 became the most downloaded app on the US Apple Store, underscoring its rapid ascent.

Training DeepSeek’s V3 reportedly cost under $6 million using Nvidia’s H800 chips—far below OpenAI’s $5 billion annual AI spend. The R1 model charges just $0.55 per million input tokens, compared to OpenAI’s $15, making it 20 to 50 times more cost-effective. In tests, DeepSeek outperformed GPT-4 and Claude AI in logical reasoning and problem-solving tasks.

Unlike competitors, DeepSeek’s R1 is fully open-source under the MIT License, allowing unrestricted use, modification, and integration. This openness, paired with faster processing and superior understanding of regional idioms, sets DeepSeek apart.

DeepSeek’s rise has shaken confidence in the billions spent by US firms like Meta and Microsoft on AI infrastructure. Nvidia alone lost $600 billion in market value amid the turmoil. US President Donald Trump and Google CEO Sundar Pichai acknowledged DeepSeek’s disruptive potential, calling it a wake-up call for American innovation.

Politically, DeepSeek aligns with China’s push for self-reliance in strategic industries. Founder Liang Wenfeng’s presence at a symposium with Premier Li Qiang signals Beijing’s commitment to leveraging AI in its geopolitical strategy. DeepSeek’s ascent signals a paradigm shift in global AI competition.

US Tech stocks tank as Chinese DeepSeek threatens AI industry

US Tech stocks tank as Chinese DeepSeek threatens AI industry
Wall Street is reeling as Chinese AI disruptor DeepSeek shakes up the tech industry, sparking a sell-off in Big Tech stocks. On Monday, the S&P 500 dropped 1.5%, with Nvidia plunging nearly 17%, dragging the Nasdaq down 3.1%. Meanwhile, the Dow Jones rose 0.7% as non-AI-related sectors held firm.

DeepSeek, developed by a Hangzhou-based research lab, has unveiled two groundbreaking models: the V3, a 671-billion parameter “mixture of experts,” and the R1, an advanced reasoning model. These models boast cost efficiency and performance that challenge US giants like OpenAI and Google. Notably, DeepSeek V3 became the most downloaded app on the US Apple Store, underscoring its rapid ascent.

Training DeepSeek’s V3 reportedly cost under $6 million using Nvidia’s H800 chips—far below OpenAI’s $5 billion annual AI spend. The R1 model charges just $0.55 per million input tokens, compared to OpenAI’s $15, making it 20 to 50 times more cost-effective. In tests, DeepSeek outperformed GPT-4 and Claude AI in logical reasoning and problem-solving tasks.

Unlike competitors, DeepSeek’s R1 is fully open-source under the MIT License, allowing unrestricted use, modification, and integration. This openness, paired with faster processing and superior understanding of regional idioms, sets DeepSeek apart.

DeepSeek’s rise has shaken confidence in the billions spent by US firms like Meta and Microsoft on AI infrastructure. Nvidia alone lost $600 billion in market value amid the turmoil. US President Donald Trump and Google CEO Sundar Pichai acknowledged DeepSeek’s disruptive potential, calling it a wake-up call for American innovation.

Politically, DeepSeek aligns with China’s push for self-reliance in strategic industries. Founder Liang Wenfeng’s presence at a symposium with Premier Li Qiang signals Beijing’s commitment to leveraging AI in its geopolitical strategy. DeepSeek’s ascent signals a paradigm shift in global AI competition.

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