DeepSeek and the AI landscape – 28th January 2025

Chinese artificial intelligence startup DeepSeek has recently introduced an AI model that rivals existing technologies like ChatGPT. This development has led to significant market reactions, with over $700 billion wiped off the value of major tech companies. Nvidia experienced a substantial loss of $590 billion, as DeepSeek's model operates efficiently with fewer Nvidia chips and less data. Other companies, including Alphabet and Microsoft, also faced notable declines, contributing to significant drops in the Nasdaq Composite and S&P 500 indices.

DeepSeek's AI model, developed at a fraction of the cost of its Western counterparts, has raised questions about the necessity of large investments in AI infrastructure. This achievement challenges the U.S. dominance in AI and suggests a potential shift in the industry's economic landscape.

Concerns have been raised about potential censorship with DeepSeek, given its development in a country known for stringent internet controls. Critics worry that the technology could be influenced by state policies, limiting its openness and objectivity. This has sparked debates about transparency and ethical standards in AI development, particularly as DeepSeek gains global attention.