The Rise of DeepSeek Technology
The continuous decline of the Indian stock market over recent weeks has created significant concern among investors. However, a new Chinese product has stirred up a major disruption in the American stock market. The US market dropped by as much as 3% following the launch of China’s DeepSeek technology, a product seen as a direct competitor to the well-known ChatGPT. US President Donald Trump has labeled DeepSeek as a warning for American companies, with Nvidia’s stock reaching a four-month low after the technology’s debut.
What Is DeepSeek?
DeepSeek is a Chinese alternative to OpenAI’s ChatGPT, offering similar functionalities but at a significantly lower cost. The DeepSeek mobile app, available for free on the Apple App Store, provides users with information based on their queries—much like ChatGPT. The key difference, however, is DeepSeek’s ability to perform similar tasks while using fewer resources and materials, thus reducing operational costs.
Impact on the US Stock Market
Following DeepSeek’s release on Monday, the US stock market experienced a sharp decline. Nvidia, a leader in AI and chip manufacturing, saw its biggest single-day loss in four months, shedding $600 billion in market value. The Nasdaq, the benchmark for US tech stocks, also witnessed a more than 3% drop, further signaling investor concern over the potential impact of DeepSeek on the AI industry.
Why Did DeepSeek Become Such a Game Changer?
There are several factors contributing to the rise of DeepSeek. The primary reason for its success is the cost-efficiency of the technology. Unlike ChatGPT, which relies on expensive materials, chips, and technologies, DeepSeek operates with fewer resources, making it a more cost-effective option. This has created major challenges for companies like Nvidia, which specialize in producing these essential components for AI models.
The Shift in AI Dominance
Until now, the US has held a strong position in the field of AI, largely due to the success of ChatGPT. However, DeepSeek’s rapid advancement is shaking America’s dominance in the AI sector. China is now emerging as a strong contender in this field, with DeepSeek technology advancing at a swift pace. The Biden administration had previously controlled the export of chips and manufacturing machinery necessary for such AI advancements. But now that these components are being more widely distributed, they are becoming readily accessible in other countries, further leveling the playing field.
A Warning for American Industries
US President Donald Trump has called DeepSeek a wake-up call for American industries. While acknowledging the threat it poses, he also highlighted the opportunity it presents for American companies to refocus on innovation and competitiveness in the global AI race. “This is a warning for our industries, as it underscores the need to focus more on competing and winning in this area,” Trump said.
