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A month ago, almost no one in the U.S. had heard of the Chinese artificial intelligence start-up DeepSeek. Today, its reported breakthroughs prompted the erasure of hundreds of billions of dollars in market value from some of the world’s biggest companies.
Last week, DeepSeek explained how its new A.I. system could match the capabilities of cutting-edge chatbots from Google and OpenAI at a fraction of the cost. That revelation forced many investors to reassess their sky-high valuations of American tech giants.
The S&P 500 fell 1.5 percent, the Nasdaq dropped 3 percent and Nvidia, the chipmaker hailed as an A.I. sensation, dropped about 17 percent and lost roughly $600 billion in market value.
Jason Karaian, our deputy Business editor, said that analysts considered DeepSeek’s emergence to be a “slap in the face” for investors who believed the A.I. race had already picked its winners.
DeepSeek’s chatbot also became the most downloaded free app in Apple’s U.S. App Store today. Its performance raised questions about the unintended consequences of the U.S. trade restrictions against China. The controls have forced researchers there to come up with creative solutions that now have some experts wondering whether U.S. companies are even competitive in A.I. anymore.
For more: Here’s what to know about DeepSeek.
