+

China's DeepSeek AI Causes Decline in Technology Shares Worldwide

 

GUWAHATI: The release of DeepSeek-R1 on January 10, an open-source AI model developed by Chinese startup DeepSeek AI, has caused a decline in technology shares over the world.

ALSO READ: India Signs ₹3,800 Crore BrahMos Missile Export Deal With Indonesia

The model has raised concerns about its potential to disrupt the AI industry and the supply chain reliant on high-tech chips.

Nasdaq futures fell by over 3%, while S&P 500 futures dropped nearly 2% during pre-market trading. Nvidia, a dominant player in the AI chip sector, saw an 8.4% slide, with other tech giants like Microsoft, Meta Platforms, and Alphabet also facing declines of 4%, 3.7%, and 3.1%, respectively.

DeepSeek AI was founded in 2023 as a division of High-Flyer, a Chinese quantitative hedge fund. Its DeepSeek-R1 model offers high reasoning capabilities, achieved through multi-stage training and large-scale reinforcement learning (RL) techniques.

The startup has also claimed that its model requires lower-cost chips and less data, potentially challenging established players like OpenAI.

While the exact cost of DeepSeek-R1’s development remains unclear, the startup stated that it was developed at a fraction of OpenAI’s costs.

facebook twitter