Chinese AI DeepSeek News: shocks financial markets and tech companies

Global Tech Stock Market Declines Sparked by DeepSeek's AI

Technology stock markets around the world have seen declines due to the Chinese application of a Chinese startup called DeepSeek, which launched its R1 model last week, to rise to the top of Apple's app stores in the US markets, which led to a wave of declines in the shares of many technology companies.

DeepSeek’s Disruptive Launch and Cost Efficiency

The chat robot generated by this Chinese company caused a violent shock in the financial markets and technology companies, after the Chinese company confirmed that it had issued this application at a low cost not exceeding 6 million dollars and in a very short time of only two months, compared to the billions that technology companies have always said they need to develop their businesses in the same field.

DeepSeek AI Stocks Global Market Impact: From Tokyo to New York

The stock markets suffered major declines due to this Chinese application, starting from Tokyo to New York, as the shares of the Japanese SoftBank Group fell on the first day of trading this week by more than 8%.

The contagion of these declines then spread to European technology companies, led by the Dutch ASML company, which specializes in semiconductor equipment, by 7%. Then it came to the American markets, which had witnessed significant declines, as the Nasdaq technology index fell by about 2.77%, down by more than 600 points, and the Philadelphia Semiconductor Index fell by 9.2%, recording its biggest loss since March 2020.

As for companies, the most prominent share was for Nvidia, which bled by 17% on Monday, erasing nearly $593 billion, making it the largest daily loss in the history of Wall Street companies.

The matter did not stop at Nvidia, as companies such as Broadcom, the chip manufacturer, fell by 17.4%, then Microsoft, the supporter of ChatGPT, and Alphabet, the parent company of Google, as well.

DeepSeek’s AI-generated chatbot, a direct competitor to ChatGPT, is capable of performing some tasks at the same level as recently released models from OpenAI, Anthropic and Meta, despite claims that it cost a fraction of the money and time required to develop.

The release of DeepSeek’s R1 model last week and its rise to the top of Apple’s App Store has sparked a selloff in tech stocks. Asian tech stocks fell on Tuesday in the wake of Wall Street’s overnight rout.

A Chinese startup is shaking up the tech community around the world, after it launched its free and advanced AI assistant DeepSeek, a competitor to the American ChatGPT.

The Chinese company has shaken up the tech community by costing less than $6 million to develop its software in two months and on a less advanced chip from Nvidia, compared to the billions spent on technology.

The Chinese app became the most downloaded app on the iPhone in the United States on its first day of launch.

From Asia to America, the application caused a wave of major declines in global technology stocks, most notably Nvidia shares, which lost more than $600 billion of their market value, the largest daily market loss ever for a company on Wall Street.

In fact, the application caused a huge wave of selling in global technology stocks, after doubts began to be raised about the issue of the high cost that companies always referred to to develop their applications and programs, compared to the low costs that the Chinese company talked about.

How DeepSeek as a Low-Cost Chinese AI Model Shook Global Markets and Challenged Industry Giants

While many developers praised DeepSeek models, many of them began to talk about trying to find loopholes in the idea that their technology, which is worth billions, has been outdone by a company with a low-cost model.

It went as far as OpenAI CEO Sam Altman saying that he would work to accelerate product releases and provide much better models, just one day after what the Chinese application caused in the world.

Many analysts have said that the Chinese application has shaken optimism about the performance of financial markets, whose recovery for years has been based on optimism about artificial intelligence and what it can cause.

Some analysts have indicated that this application will be enough to give a good signal to anyone who was pessimistic about the large gap between Chinese and American technology, specifically in the field of artificial intelligence. Now, the matter remains largely left to what the experiments of this Chinese application will lead to, how competitors will respond, the financial results of the businesses of major companies, and the American response, especially since the American president had announced directing 500 billion US dollars to support capabilities in the field of artificial intelligence.