Mon Jan 27 23:42:04 UTC 2025: ## Chinese AI Chatbot Shakes Up US Tech Market, Sending Nvidia Stock Plummeting

**New York/London** – The rapid rise of DeepSeek, a Chinese AI chatbot app, sent shockwaves through US and European tech markets on Monday, causing a significant drop in the value of major tech companies. Nvidia, a leading AI chipmaker, saw its stock plunge by 16.9%, losing over a sixth of its market capitalization. Other tech giants, including Microsoft (down 2.14%) and Alphabet (Google’s parent company, down over 4%), also experienced significant losses. European firms, such as ASML and Siemens Energy, were similarly affected.

DeepSeek, launched last week, quickly became the most downloaded free app in the US. The app’s success is attributed to its reportedly low development cost – approximately $6 million – a fraction of the billions invested by its American competitors. This has raised concerns about the future of US AI dominance and the viability of massive investments pledged by US firms, including a recently announced $500 billion infrastructure project.

The low cost of DeepSeek, which utilizes open-source code and existing technologies, is partly due to Chinese AI developers’ innovative approaches to circumvent US restrictions on the sale of advanced AI chips to China. This has led to AI models requiring significantly less computing power and consequently, lower costs.

The app’s performance, reportedly comparable to OpenAI’s latest models in tasks such as math, coding, and natural language reasoning, has been described as an “AI Sputnik moment” by Silicon Valley venture capitalist Marc Andreessen, referencing the Soviet Union’s 1957 satellite launch that spurred the US space race.

While DeepSeek’s disruptive potential is undeniable, concerns remain. The company temporarily limited registrations due to a large-scale cyberattack. Analysts at Citi cautioned that while DeepSeek could challenge American companies, challenges faced by Chinese firms could hinder their long-term development. Others, however, highlighted the potential for DeepSeek to derail investment in the entire AI supply chain. The unexpected emergence of a low-cost, high-performing competitor caught the market off guard, prompting widespread concern about the profitability of established AI companies.

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