Why global markets cracked after launch of Chinese startup Deepseek’s AI model
Deepseek Chinese AI startup: The sharp sell-off in global tech stocks was triggered by concerns over DeepSeek’s lower cost of creating AI tools compared to other US-based AI companies.
DeepSeek has released its cost-effective open source AI platform. (Reuters photo) The fast gaining popularity of Chinese AI app DeepSeek has taken the tech sector in the US and other markets by storm. The sharp sell-off in global tech stocks was triggered by concerns over DeepSeek’s lower cost of creating AI tools compared to other US-based AI companies. The Nasdaq 100 lost nearly 3 per cent and the Wall Street favourite Nvidia declined 17 per cent on Monday.
What led to a rout in global markets?
DeepSeek is a Chinese artificial intelligence company based in Hangzhou, the capital city of the Chinese province Zhejiang. The company was founded by Liang Wenfeng, a hedge fund manager.
Earlier this month, the startup released its open source AI platform, which is much more cost-effective than models developed by leading US companies. This led to a concern that DeepSeek may derail the growth story of major tech companies across the world.
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