Tue Jan 28 07:40:00 UTC 2025: ## Chinese AI Startup DeepSeek Shakes Up US Tech Market With Budget Chatbot

**San Francisco, CA –** A Chinese AI company, DeepSeek, has sent shockwaves through the US tech market with its surprisingly low-cost chatbot application, which has rapidly become the most downloaded free app on the Apple App Store since its January launch. The app, similar in functionality to ChatGPT, boasts comparable performance at a fraction of the development cost.

DeepSeek, founded in Hangzhou, China, in July 2023, claims to have developed its AI models for a mere $6 million, a stark contrast to the billions spent by its American counterparts. This low-cost achievement has been attributed to the strategic use of a large stockpile of Nvidia A100 chips – previously acquired before export restrictions – combined with less expensive, readily available components. The company’s founder, Liang Wenfeng, reportedly amassed around 50,000 of these high-performance chips. Liang recently met with Chinese Premier Li Qiang to discuss the company’s success.

The app’s popularity has prompted Silicon Valley venture capitalist Marc Andreessen to hail DeepSeek as a “remarkable and astonishing breakthrough” in the AI field. While the app generally receives high praise for its capabilities and helpfulness, it has reportedly avoided answering at least one politically sensitive question, declining to comment on the Tiananmen Square incident of 1989.

However, DeepSeek’s success has triggered a significant market downturn. On January 27th, the Nasdaq index plummeted over 3%, largely due to a sell-off affecting chip manufacturers and data centers globally. Nvidia, a key player in the AI chip market, was hit hardest, losing nearly $600 billion in market capitalization in a single day – the largest one-day drop for any US company in history. Other tech giants, including Microsoft, Alphabet, Tesla, and Cisco, also experienced significant stock declines. Apple and Meta, however, saw modest gains.

The unexpected success of DeepSeek challenges the prevailing belief that massive budgets and cutting-edge chips are prerequisites for AI development, casting uncertainty over the future demand for high-performance chips and potentially reshaping the landscape of the AI industry. The app is available for free download on the Apple App Store and DeepSeek’s website.

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