DeepSeek AI shakes American swagger and upends assumptions

The app spooked the markets as well as the bullish sense of American superiority in AI development.

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Venture capitalist Marc Andreessen may have said it best. "DeepSeek-R1 is AI's Sputnik moment," he posted to X on Sunday, referring to the satellite which kicked off the space race.

DeepSeek was the most downloaded free app on Apple's US App Store over the weekend. By Monday, the new AI chatbot had triggered a massive sell-off of major tech stocks which were in freefall as fears mounted over America's leadership in the sector.

Shares of AI chip designer and recent Wall Street darling Nvidia, for example, had plunged by 17% by the time US markets closed on Monday. Or to put it in even starker terms, it lost nearly $600bn in market value which, according to Bloomberg, is the biggest drop in the history of the US stock market.

This extraordinary, historic spooking can largely be attributed to something as simple as cost. And a claim by DeepSeek's developers which prompted serious questions in Silicon Valley.

https://www.bbc.com/news/articles/cd643wx888qo

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