The last 24 hours in the AI world have been monumental.
The Chinese AI app DeepSeek has shaken the technology industry, the markets and the bullish sense of American superiority in the field of artificial intelligence (AI) has been nothing short of stunning.
Venture capitalist Marc Andreessen may have said it best. "DeepSeek-R1 is AI's Sputnik moment," he posted to X on Sunday, referring to the satellite which kicked off the space race.
The company has attracted attention in global AI circles after writing in a paper last month that the training of DeepSeek-V3 required less than $6 million worth of computing power from Nvidia H800 chips.
Analysts say Deepseek can operate at a lower cost than American AI models like ChatGPT. It's disrupting markets and raising national security questions about China's progress to develop advanced AI.
The potentially groundbreaking, open-source tech has called into question the gargantuan AI investments made by American companies and has put Meta’s AI-dedicated team on high alert.
Yet many in Silicon Valley believe the broad sell-off is an overreaction to DeepSeek’s latest model, which they argue could spur wider adoption and utility of AI by radically lowering the technology’s cost, sustaining demand for Nvidia’s chips.
America has increasingly sought to structure its entire economy around the AI industry, and Wall Street has poured billions into the companies selling this technology. Most recently, the Trump administration announced “Stargate,” a $500 billion effort to create “AI infrastructure” by building data centers across the U.S. The gross amount of power and capital that has flowed into the small coterie of tech companies behind this technology is truly obscene.
And yet, somehow, a Chinese company that appears to have a smidgeon of Big Tech’s resources was able to create a comparable product in less time and fly to the top of the mobile downloads charts in a matter of weeks.
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