DeepSeek, a Chinese AI startup founded in late 2023, has sent shockwaves through the global tech industry with the release of its R1 model, which reportedly matches the capabilities of leading AI chatbots at a fraction of the cost. The development has sparked significant market reactions and raised questions about the future of AI technology.
Reacting to the viral news, the company’s mobile app has surged to the number one spot in Apple’s App Store across 51 countries, surpassing the numbers held by ChatGPT. DeepSeek’s mobile app has recorded a total number of downloads reaching 2.6 million across iOS and Android platforms. DeepSeek claims it spent just $5.6 million on computing power for its base model, compared to hundreds of millions reportedly spent by U.S. competitors.
This efficiency breakthrough has rattled investors, causing Nvidia’s stock to plummet nearly 17%, wiping about $600 billion off its market value. The broader tech sector also felt the impact, with the Nasdaq falling 3.1%.
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The development is particularly notable given U.S. restrictions on exporting advanced AI chips to China. DeepSeek’s achievement suggests that cutting-edge AI capabilities might be possible with fewer resources than previously thought, using only about 2,000 specialized Nvidia chips compared to the 16,000 typically required for leading models.
Tech investor Marc Andreessen called it “AI’s Sputnik moment,” highlighting the potential shift in the global AI landscape. The breakthrough raises questions about the massive investments planned by U.S. tech giants, including Meta’s $65 billion AI development budget for this year.
