DeepSeek Mania Shakes AI Industry to Its Core
DeepSeek, a relatively unknown Chinese-developed AI model, is now the most popular app in the US Apple App Store based on hype associated with it releasing an an AI model that outpaces OpenAI’s and other companies’ models on some benchmarks while being trained on older chips at a much lower cost. It has caused Nvidia stock, which has become one of the most valuable companies in history thanks to the AI boom, to tumble and is causing more widespread panic in the U.S. market. Marc Andreessen has called this “AI’s Sputnik moment,” referring to the first Russian satellite which got ahead of and accelerated the US space program.
People in the AI space and those who follow it closely started freaking out when DeepSeek’s newest model, DeepSeek R1, was released last week, and that freakout has now seemingly captured the entire world, impacting the stock market, causing people to wonder if American companies like OpenAI and Nvidia can really dominate the AI industry, if the AI bubble is finally popping, and if this is a sign of imminent Chinese world domination and censorship. DeepSeek is particularly notable because it is free, modifiable, and less expensive to run, which has experts worried about the viability of OpenAI’s already unprofitable subscription products.
I’m going to be upfront with you here and say that 404 Media does not provide any financial advice and that if I had definitive answers to any of these questions I’d be playing the stock market instead of blogging, but in a day when the takes are going to come fast and furious my take is this: The AI industry continues to develop very fast, it’s hard to extrapolate how it’s all going to unfold based on single event, even if it’s monumental, and the fact that DeepSeek comes from China, a perceived adversary to the United States/the West is making hawks and xenophobes, and tankies foam at the mouth.
