Chinese AI App DeepSeek Causes Massive Drop in U.S. Tech Stocks
The launch of DeepSeek, an affordable AI app developed by a Chinese startup, has caused shockwaves across the U.S. tech sector. Nvidia’s shares plummeted nearly 17%, erasing $600 billion in market value in a historic market drop. DeepSeek, described as a low-cost alternative to established AI models like OpenAI’s ChatGPT, has quickly become the most downloaded app on the U.S. App Store.
Experts attribute DeepSeek’s success to its ability to operate effectively with older AI chips, reducing development costs while delivering competitive performance. Analysts warn that this development challenges the U.S.’s dominance in AI and raises concerns about profitability for American firms heavily invested in expensive AI infrastructure.
Former U.S. President Donald Trump called the event a “wake-up call” for American AI firms to enhance competitiveness. At the same time, financial markets saw a ripple effect, with safe-haven currencies like the Japanese yen and Swiss franc gaining ground. DeepSeek’s rise underscores growing competition in the global AI race and its potential to reshape the industry.
Source: ČT24
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