What Is Deepseek? & Why Does It Have US Tech Bros Losing Their Sh*t
Written by djfrosty on January 29, 2025
Source: RICCARDO MILANI / Getty / Deepseek
The arrival of Deepseek, a Chinese AI app, rocked the tech world and currently has US tech bros shaking in their boots.
First things first: What the hell is Deepseek? Per CNN, Deepseek is a year-old Chinese start-up offering an open-source AI model, R1, that is close to or better than the advanced models from American tech giants. But get this: It was built for a fraction of the cost, runs on less advanced chips, and uses far less data center power.
This is a big deal because the common belief is that US tech companies would spend billions to stay ahead of the AI game, but with Deepseek, China is proving that to be not the case, and Wall Street is looking at them like, oh, word?
Deepseek’s arrival was so alarming that it scared big tech investors, with some of the biggest tech stocks taking a hit.
Per The New York Times:
The Chinese AI company DeepSeek has said it can match the abilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading AI companies rely on. That’s prompted investors to rethink the heady valuations of companies like Nvidia, whose equipment powers the most advanced AI systems, as well as the enormous investments that companies like Alphabet, Meta and OpenAI are making to build their businesses.
On Monday, the S&P 500 index fell 1.5 percent, and the tech-heavy Nasdaq dropped 3.1 percent. Nvidia was hit hard, plunging 16.9 percent and losing roughly $600 billion in market value. Falling tech stocks also dented market indexes in Europe and Japan.
Hilariously, Donald Trump recently announced a $500 billion investment in AI infrastructure called the Stargate initiative, who thinks of these names?
OpenAI, SoftBank, and Oracle will lead it. No one put it together at the time, but it would seem this announcement could have been made in anticipation of Deepseek’s arrival. Trump’s buddy, Elon Musk, also slammed it.
Deepseek isn’t being warmly welcomed stateside; the US Navy has already banned its use due to ethical and security concerns.
Welp.
It will be interesting to see how Deepseek continues to shake things up. The gallery below shows social media reactions to the AI model’s arrival.