The arrival of a previously little-known Chinese tech company has attracted global attention as it sent shockwaves through Wall Street with a new AI chatbot.
On Monday, DeepSeek, a tiny company which reportedly employs no more than 200 people, caused American chipmaker Nvidia to have almost $600bn wiped off its market value – the biggest drop in US stock market history.
The Chinese AI chatbot threatens the billions of dollars invested in AI while causing US tech stocks to lose well over $1trn (£802bn) in value, according to market analysts.
DeepSeek, which has developed two models, V3 and R1, is now the most popular free application on Apple’s App Store across the US and UK.
What’s DeepSeek?
The startup was founded in 2023 in Hangzhou, China, by Liang Wenfeng, who previously co-founded one of China’s top hedge funds, High-Flyer.
The fund had by 2022 amassed a cluster of 10,000 of California-based Nvidia’s high-performance A100 graphics processor chips that are used to build and run AI systems, according to a post that summer on Chinese social media platform WeChat.
Former US President Joe Biden’s administration restricted sales of those chips to China soon after, something likely to be pursued by his successor, Donald Trump, who was recently sworn in for a second term in the White House.
Why all the attention now?
The hype – and market turmoil – over DeepSeek follows a research paper published last week about the R1 model, which showed advanced “reasoning” skills.
They include the ability to…
