On Monday, over a trillion dollars was wiped off the US stock market due to the appearance of a Chinese artificial intelligence start-up DeepSeek.
The release of a new reasoning model, known as R1, led investors to question US dominance in tech, their expectations around future AI capex while also raising the prospect that China might beat Silicon Valley at its own game.
The new DeepSeek model can “reason” to solve complex problems and performs as well as the AI software from US tech giants like Google and OpenAI, but was apparently developed at a fraction of the price of those models.
DeepSeek quickly overtook OpenAI’s ChatGPT as the most-downloaded free app on the US iOS App store.
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