A Chinese AI company has panicked Wall Street tech investors with its cost-efficient AI model rivaling giants such as OpenAI and Google.
DeepSeek developed the model with around $6 million, a small fraction of the cost that other companies incurred training their models, and released it on Jan. 20. OpenAI spent billions developing its ChatGPT model in 2024.
Immediate effects
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The stock market reacted strongly to the company’s advance on Jan. 20, with the S&P 500 sinking nearly 2% and tech companies facing the brunt of the sell-off. Nvidia, which develops a large number of the United States’s graphic processing units that power AI, had its stock drop about 17% as of 2 p.m. Tuesday.
“DeepSeek AI’s entry into the market offers a disruptive combination
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