Deepseek, a Chinese artificial intelligence (AI) startup founded in 2023 by Liang Wenfeng, has sparked chaos in global markets. The company’s latest model, Deepseek V3, is a game-changer—featuring 671 billion parameters yet costing just $5.58 million to develop. This remarkable efficiency has stunned the AI sector, where giants like OpenAI and Anthropic spend billions on similar projects.
Deepseek’s affordable yet powerful AI technology positions it as a serious competitor to major players such as OpenAI, Meta, and Nvidia. Its open-source large language models (LLMs) are revolutionising algorithmic refinement and sparking debates about the future of AI innovation.
Impact on U.S. Stocks: Nvidia and Tech Giants Decline
The unveiling of Deepseek V3 has sent shockwaves through the U.S. tech industry. Stocks of major tech firms like Nvidia, Microsoft, and Meta have seen significant declines as investors reevaluate the sustainability of high-cost AI ventures. Nvidia, a key player in AI hardware, has been particularly impacted as Deepseek’s low-cost approach undermines the perceived necessity of expensive infrastructure.
Nvidia shares on Jan. 27, 2025.
This development not only disrupts the tech sector but also emphasises China’s growing influence in the AI space, challenging U.S. dominance.
Cryptocurrency Market Turmoil
Deepseek’s influence has extended beyond traditional markets to the volatile cryptocurrency sector. Speculation around AI-driven crypto tokens has surged, but not without consequences. Major AI-focused tokens, including prominent projects like the AI Agent Coin Spectrum, have experienced steep declines.
Bitcoin, often seen as a bellwether for tech-related trends, has also faced pronounced volatility. On January 27, it slipped below the critical $100,000 mark, driven by broader market uncertainties linked to Deepseek’s disruptive entry.
A New Era in Global AI Competition
Deepseek’s meteoric rise symbolises a pivotal shift in global AI dynamics. The company’s groundbreaking models prove that cutting-edge innovation doesn’t always require exorbitant resources, challenging Western tech giants’ assumptions.
As of January 27, Deepseek’s app has soared to the top of Apple’s App Store rankings, surpassing competitors like OpenAI’s ChatGPT and Meta’s Threads. This ascent underscores the startup’s growing popularity and influence, reshaping the global AI landscape.
Deepseek’s disruptive approach highlights China’s expanding role in AI development while raising critical questions about the future of global technology leadership. Its trajectory signals not only a challenge to Silicon Valley’s dominance but also a new era of AI-driven market dynamics.
