What is DeepSeek and Why is it Harming Tech Stocks? OpenAI, Microsoft, and Google have all been huge players in the modern AI space, but a new competitor is emerging. DeepSeek is a Chinese artificial intelligence company that claims to...
By Matt Rowe
This story originally appeared on Due
OpenAI, Microsoft, and Google have all been huge players in the modern AI space, but a new competitor is emerging. DeepSeek is a Chinese artificial intelligence company that claims to rival ChatGPT, Google Gemini, and Microsoft Copilot. While it is still relatively new, many investors are uncertain how it will impact the American technology and AI scene.
American AI companies plan to invest about $1 trillion in AI in the future, which is no surprise. What is a surprise, however, is that the development cost for DeepSeek is only about $6 million, significantly lower than what American companies spend on their AI platforms. This is one of the reasons why DeepSeek has caused stocks of American AI companies such as NVIDIA to take a serious hit. Giuseppe Sette, president at Reflexivity, an AI market research firm, said, “DeepSeek has taken the market by storm and by doing more with less… This shows that the surprises will keep coming with AI in the next few years.”
It may be safe to say that the leaders of Google, NVIDIA, OpenAI, and Microsoft didn’t see this coming. Because of the new competitor, AI-related stocks took a significant hit, especially NVIDIA. The stock decreased by 17% in value, ending in the largest one-day loss for any company in stock market history.
What is DeepSeek?
DeepSeek is a private Chinese company founded by Liang Wenfeng. Liang previously had bought large quantities of NVIDIA A100 chips, which became the foundation for him to build off of to create DeepSeek. Director of technology research at Melius Research LLC, Ben Reitzes, said DeepSeek is better at learning and uses memory storage more effectively. However, Reitzes remains skeptical about the “amounts of chips used.” The AI is available on the Apple App Store and the DeepSeek website. It is free to use, but some are skeptical about using a Chinese-based AI tool. The company struggled to sign individuals up for the app. This is not because there wasn’t interest; many people were interested in the tool’s usefulness. DeepSeek said there were “large-scale malicious attacks,” and the company had to limit new registrations temporarily.
What do you think about DeepSeek? Will it put other AI tools to shame? Is it a threat to US security? Let us know in the comments.
Featured Image Credit: Pixabay; Pexels: Thank You!
