New Delhi: The Hongzhou-based innovative budget-friendly AI startup DeepSeek AI positioned in China has destabilized international stock markets by delivering enormous value depreciation in leading US technology companies. Nvidia suffered the biggest single-day market value loss in Wall Street history when DeepSeek released its free AI assistant resulting in a $593 billion value decrease that equated to a 17% plunge.
DeepSeek’s popularity leads investors to wonder about expensive American-made AI tools’ business sustainability. Your money will go further by using DeepSeek which offers the same capabilities despite charging significantly lower prices. DeepSeek’s AI assistant surpassed OpenAI’s ChatGPT to become the top choice for iOS App Store users across UK and Canada alongside Australia China and Singapore.
The startup operates with technology that incorporates both DeepSeek-V3 and DeepSeek-R1 module models. The V3 model launched on January 10 relied on Nvidia’s H800 chips to process data while its development cost $6 million. DeepSeek-R1 represents the startup’s latest model that operates at costs that are between 20 and 50 times lower than what OpenAI’s models demand for each task they perform.
When DeepSeek launched it caused drastic impacts throughout the United States stock market. On January 27 the Nasdaq index adjusted down more than 3% after a sharp decline by Nvidia took the market down. Software giant Microsoft declined 2.1% while Alphabet company Google’s parent organization dropped 4.2%. Establishment analysts warn that Philadelphia semiconductor companies experienced their worst market decline since March 2020 by losing 9.2% of their value. Following DeepSeek’s debut Marvell Technology experienced a massive 19.1% drop in market value.
The technology market triggered its decline first in Asia when SoftBank’s stock dropped 8.3% before spreading across European markets where ASML’s value fell 7%. Energy stocks experienced major losses in recent markets with Vertiv Holdings declining over 30% followed by substantial drops from Vistra and Constellation Energy.
An intensive examination by specialists aims to determine what will be the lasting effect of DeepSeek’s groundbreaking technology on the artificial intelligence business. DeepSeek’s potential technological breakthrough has caught the attention of economist Brian Jacobsen from Annex Wealth Management because its validity could transform the future of AI according to his views. The need for expensive chips together with massive power consumption and large data centers has the potential to reduce dramatically which could fundamentally modify the entire tech ecosystem.
Former US President Donald Trump declared DeepSeek to be a “wake-up call” which indicated potentially positive developments in the way tech leaders and investors operate.
Developments in the stock market have made financial institutions acknowledge the need for adjusting their operational models. Research shows financial institutions may either decrease their technology assets or adopt more conservative strategies because customers move toward prudent investments.
