Deepseek AI

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Shares in major US tech companies have taken a hit following the rapid rise of DeepSeek, a low-cost AI chatbot developed by a Chinese firm. Launched just last week, the DeepSeek app has quickly overtaken competitors like OpenAI's ChatGPT to become the most downloaded free app in the US. This shift has caused significant drops in the stock prices of tech giants such as Nvidia, Microsoft, and Meta.

DeepSeek’s sudden success is partly due to its ability to create a highly functional AI model, DeepSeek-V3, for just $6 million—far cheaper than the billions spent by US companies on similar projects. By using open-source technology and pre-existing software, DeepSeek has created a more affordable alternative to US-developed AI, raising concerns about the future of American AI dominance.

The company’s rapid ascent comes amid growing tensions between the US and China over advanced chip technology. As the US restricts chip exports to China, Chinese AI developers, including DeepSeek, have been forced to experiment with new, cost-effective technologies. This has resulted in AI models that require far less computing power, challenging the AI industry’s economics and potentially upending the investment landscape.

Despite the disruption, experts caution that Chinese firms like DeepSeek may face challenges due to ongoing geopolitical tensions. However, with its low-cost approach and impressive capabilities, DeepSeek’s emergence could shake up the global AI market and reshape the competitive landscape for years to come.

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