DeepSeek's Rise Disrupts U.S. Tech Market Valuation
Brief news summary
A month ago, the Chinese AI start-up DeepSeek was largely unknown in the U.S. However, recent breakthroughs have significantly impacted global markets, wiping out hundreds of billions in value from major companies. DeepSeek announced its AI system can compete with top chatbots from Google and OpenAI at a fraction of the cost. This revelation led investors to reconsider the inflated valuations of American tech firms, resulting in a 1.5% drop in the S&P 500 and a 3% decline in the Nasdaq. Nvidia, known for its AI advancements, experienced a dramatic 17% decrease in stock prices, equating to a loss of approximately $600 billion in market value. Analysts view DeepSeek’s rise as a wake-up call for investors who thought there were clear leaders in the AI sector. Furthermore, DeepSeek's chatbot quickly became the most downloaded free app on Apple's U.S. App Store, sparking discussions about the effects of U.S. trade restrictions on China’s AI research and the evolving competitive landscape in the industry.A month ago, few people in the U. S. had heard of the Chinese AI startup DeepSeek. Today, its reported advancements have led to the loss of hundreds of billions of dollars in market value for some of the world’s largest corporations. Last week, DeepSeek detailed how its new AI system could compete with the advanced chatbots from Google and OpenAI at a significantly lower cost. This announcement forced many investors to rethink their lofty valuations of American tech firms. The S&P 500 declined by 1. 5 percent, the Nasdaq fell by 3 percent, and Nvidia, the chipmaker considered an AI powerhouse, saw a drop of about 17 percent, losing around $600 billion in market value. According to Jason Karaian, our deputy Business editor, analysts viewed DeepSeek’s rise as a "slap in the face" to investors who believed the AI competition had already determined its winners. DeepSeek’s chatbot also became the most downloaded free app on the Apple U. S. App Store today. Its success has raised concerns about the unintended repercussions of U. S.
trade restrictions on China. These controls have led researchers there to devise innovative solutions, prompting some experts to question whether U. S. companies can remain competitive in AI. For additional information: Here’s what you need to know about DeepSeek. Thank you for your patience as we verify access. If you are in Reader mode, please exit and log into your Times account, or subscribe for full access to The Times. Thank you for your continued patience. Already a subscriber?Log in. Interested in all of The Times?Subscribe.
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