The main shares of American technology, including NVIDIA, Oracle and Broodcom, fell on Monday after Deepseek, represented by Deepseek, which says it is competing with the Chatgpt from Openai at a much lower cost.
NVIDIA and Broadcom chips fell by about 17 %, while the price of the Oracle shares decreased by 14 %. The technology sale has reduced the broader securities market. The Standard & Poor’s 500 index decreased by 1.5 % and 3 % decreased NASDAQ 100 %.
“Companies are concerned that Deepseek will crush the capabilities of AI’s giants,” said Ray Wang, CEO of Constellation Research, a research and advisory company in Silicon Valley.
Despite its influence that is moving in the market, Deepseek is hardly a familiar name in the United States.
What is Dempsic and behind it?
Deepseek is a Chinese emerging company that develops open source Amnesty International models, similar to ChatGPT, which has helped bring obstetric artificial intelligence to the main current.
Its mobile application has risen to the highest Apple download plans in the United States after its release in early January. The Deepseek Mobile app has been downloaded 1.6 million times by Saturday and ranked first in iPhone apps in Australia, Canada, China, Singapore, the United States and the United Kingdom, according to data from the Market Tracker application numbers.
The same application distinguishes from other Chatbots such as ChatGPT by expressing its thinking before submitting a response to a claim. Company Claims Its latest model, Deepseek-R1, offers an equal performance with the latest Openai, and allows individuals interested in developing Chatbots on technology based on its programs.
Deepseek caught the attention of the Silicon Valley by saying that it could compete with Openai at lower costs. Deepseek said it needs approximately 2000 specialized computer chips from NVIDIA to train Chatbots, according to The New York Times. The newspaper reported that American companies, in comparison, use giant computers with up to 16,000 chips and sometimes more.
The director of the hedge fund, Liang Winfing, established Debsik in 2023. Liang participated in establishing the hedge fund with college friends in 2015 shortly after graduating, according to the Wall Street Journal.
Why did technology shares take this success?
On Monday, NVIDIA lost approximately $ 600 billion in market value, which is the largest decrease in one day of a company in the history of the United States, According to CNBC.
Investors are concerned that if Deepseek is able to create a model that requires fewer chips, this would reduce the demand for NVIDIA semiconductors and other companies. It can also reduce the competitive edge of American technology giants that have invested billions of dollars in artificial intelligence technology.
Washington has banned the export of high -end technologies such as semiconductor graphics processing unit (or graphics processing units, which are decisive for artificial intelligence technology) to China, in an attempt to stop the country’s progress. But Deepseek’s progress indicates that Chinese artificial intelligence engineers have made their way about restrictions, focusing on greater efficiency with limited resources.
“The Deepseek model is very impressive, especially since Deepseek had to move in strict chips restrictions from the United States,” wrote Daniel Evez, Widbush Stock Analyst in a research note on Monday. “It remains to see whether Deepseek has found a way to overcome the rules of these chips and the chips they used in the end, as there will be many skeptics about this issue given the information coming from China.”
How much is the threat that China poses to the dominance of the United States in the artificial intelligence market?
The United States is still a major pioneer in the artificial intelligence sector, with 68 % of global investment capital financing in artificial intelligence companies in the third quarter of last year, according to CB Insights. The geographical area of the Silicon Valley took about half of this amount.
Some leaders in space including startups that are based in San Francisco are the headquarters of the San Francisco maker, as well as the OPHABET and Meta giants. Alphabet shares fell 4 % on Monday, while Meta rose slightly.
Some analysts were skeptical of Dibsic’s health and what the model could actually accomplish. After all, other companies may try to match Deepseek savings.
“What Dibsic has shown is that there are many gains that Amnesty International can achieve,” said Wang. “However, we did not check whether this was true or not and what are the problems that are solved.”
He said China is “a strong competitor”, but “the war of psychological operations, as we saw today, is stronger than they can present.”
How will the Trump administration respond?
Trump stressed the importance of America being a leader in artificial intelligence and innovation technology.
“Deepseek, Amnesty International from a Chinese company, must be an invitation to wake up to our industries that we need to focus on competing for victory,” Trump said At a Republican Conference in the House of Representatives in Florida on Monday.
After Trump began his second term as a president, he is Eliminate Executive order signed by President Biden in 2023 requires artificial intelligence companies to share the safety test results with the United States government.
Although some people in the technology industry ignited the executive order for Biden as a way to create handrails and guidelines for artificial intelligence companies, others have expressed concern about strangling innovation. Trump, while one of the candidates warned that Biden’s policies, including this executive, were not working.
On Monday, David Sachs, Trump White House Amnesty International and Crypto CZARDibsic said it has shown that the artificial intelligence race would be a very competitive.
President Trump was right to cancel Biden Eye, who was exposed to American artificial intelligence companies without asking whether China would do the same. (It is clear that no.), “Sacks wrote on Monday on the social media platform x
Trump announced last week that Openai, Oracle and SoftBank are committing to $ 100 billion for an initiative called the Stargate project, with plans to invest $ 500 billion in Amnesty International’s infrastructure over the next four years. Trump said it would help create more than 100,000 American jobs.
Bloomberg contributed to this report.