DeepSeek - a newly launched app from China - caused the US stock market to lose more than $1,000 billion on January 27 and here's what you need to know.
Fears that the artificial intelligence (AI) gold rush may be at risk rocked Wall Street on January 27, as the US stock market lost more than $1 trillion in value in a single day after a ChatGPT-like model from China emerged, leading to predictions of chaos in Silicon Valley and accusations of fraud.
The release of the latest DeepSeek model last week initially received little attention and was overshadowed by the inauguration of US President Donald Trump, which took place on the same day.
However, over the weekend, the Chinese artificial intelligence startup's chatbot unexpectedly became the most downloaded free app on Apple's App Store in the US, surpassing OpenAI's ChatGPT.
Why is this important?
What really sent shockwaves through the industry was DeepSeek's claim that it had developed its latest model, R1, for just $5.6 million — a pittance compared to the billions of dollars that US tech giants have poured into AI, mostly on expensive Nvidia chips and software.
The event is particularly notable because the AI boom, which began with ChatGPT's launch in late 2022, has made Nvidia one of the most valuable companies in the world.
The news sent shockwaves through the U.S. tech sector. Nvidia, which supplies semiconductor chips to the AI industry, fell more than 17% in midday trading on Wall Street, wiping out more than $500 billion in market value.
Chipmaker Broadcom shares fell 17%. AMD fell 6.4%. Other AI stocks in the US also fell, with Micron down 8%, Arm Holdings down 9%... while Dutch company ASML, which specializes in making machines used to make semiconductor chips, saw its shares fall 6.7%.
How does the DeepSeek event impact the world's technology sector?
The emergence of DeepSeek, a company with less than 200 employees that does not need to use powerful chip complexes while still achieving outstanding efficiency, will force American technology giants like OpenAI and Google to reconsider their development strategies.
Instead of investing in hardware to buy tens of thousands of expensive Nvidia super-fast chips or build AI factories, American corporations may have to turn to algorithm optimization to reduce costs.
The war in the technology field in general, in the AI field in particular, and between the US and China could therefore be more fierce than ever after DeepSeek appeared and caused a storm at the beginning of the new year 2025.
According to Tin Tuc Newspaper
Source: https://doanhnghiepvn.vn/quoc-te/chung-khoan-my-boc-hoi-hon-1-000-ty-usd-trong-con-ac-mong-cong-nghe/20250128111618377
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