A Chinese AI company named DeepSeek has piqued interest in America, creating a stir on Wall Street with its new technology that matches OpenAI’s ChatGPT. DeepSeek’s AI app has stunned investors due to its low development cost, an estimated $6 million, roughly minuscule when compared to the potential $1 trillion investment in AI by major U.S. companies over the upcoming years.
DeepSeek’s debut caused considerable volatility in shares of AI giants. NASDAQ took a hit with a 3% slump and a 612-point drop on the S&P 500 in contrast. Energy-related stocks also suffered losses over reduced energy demand expectations.
Founded in July 2023, DeepSeek is the brainchild of Zhejiang University’s graduate, Liang Wenfeng, and is supported by his fund, BoltV Portfolio.
Despite concerns over possible over-valuation of tech stocks buoyed by AI prospects, DeepSeek’s launch indicates the race for innovation will remain competitive. While some experts praised its groundbreaking advancements, there are concerns about its ability to disrupt major U.S. businesses.
However, it’s not all doom and gloom on Wall Street. Some believe that DeepSeek’s technology, while disruptive, is not revolutionary, and Monday’s investment rout is likely an overreaction. Yet concerns remain, especially with the potential undercutting of Nvidia, a dominant player in AI technology, by DeepSeek’s low-cost tech.
As the dust settles, it’s clear that DeepSeek is a disruptive influence in the AI industry, setting a potential new benchmark for cost-effective, innovative technology. As DeepSeek continues to scale and potentially disrupt the AI industry, Wall Street is sure to keep a close eye on its continued development.
