U.S. technology stocks plunged as Chinese startup DeepSeek sparked concerns over competitiveness in AI and America’s lead in the sector, triggering a global sell-off
DeepSeek launched a free, open-source large-language model in late December 2024, claiming it was developed in just two months at a cost of under $6 million.
The developments have stoked concerns about the large amounts of money big tech companies have been investing in AI models and data centres.
DeepSeek is a Chinese artificial intelligence startup that has recently gained significant attention in the AI world. Founded in 2023 by Liang Wenfeng, DeepSeek develops open-source large language models. The company is funded by High-Flyer, a hedge fund also founded by Wenfeng.
The AI models from DeepSeek have demonstrated impressive performance, rivaling some of the best chatbots in the world at a fraction of the cost. This has caused quite a stir in the tech industry, leading to significant drops in the stock prices of major AI-related firms.
The company’s latest model, DeepSeek-V3, is known for its efficiency and high performance across various benchmarks.
DeepSeek’s emergence challenges the notion that massive capital expenditure is necessary to achieve top-tier AI performance.
The company’s success has led to a re-evaluation of the AI market and has put pressure on other tech giants to innovate and reduce costs.