DeepSeek was reportedly developed for a fraction of the cost of its US rivals – hundreds of millions of dollars less – raising questions about the future of America’s AI dominance.
The company’s possibly lower costs roiled financial markets on 27 January, leading the tech-heavy Nasdaq to fall more than 3% in a broad sell-off that included chip makers and data centres around the world.
Nvidia, a US-based company that makes the powerful chips that run AI, appears to have been hit the worst.
It lost nearly $600bn in market value on Monday – the largest one-day drop for any company in US history – as its stock price plunged 17% over the course of the day.
Nvidia had been the most valuable company in the world, when measured by market capitalization, but fell to third place after Apple and Microsoft on Monday when its market value shrank to $2.9tn from $3.5tn, Forbes reported.
DeepSeek uses less advanced semiconductor chips than the ones created by Nvidia.
Their success undercuts the belief that bigger budgets and top-tier chips are the only ways of advancing AI, a prospect which has created massive uncertainty about the need and future of high-performance chip.
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