DeepSeek: A shocking Chinese AI advancement called DeepSeek is sending US stocks plunging

The Dow opened about 369 points, or 0.8%, lower. The S&P 500 fell by 2% and the tech-heavy Nasdaq plunged by 3.6%. The Nasdaq hasn’t closed 4% lower since September 2022.

Meta last week said it would spend upward of $65 billion this year on AI development. Sam Altman, CEO of OpenAI, last year said the AI industry would need trillions of dollars in investment to support the development of in-demand chips needed to power the electricity-hungry data centers that run the sector’s complex models.

Global chip stocks slumped Monday after Chinese artificial-intelligence company DeepSeek said it had developed AI models that nearly matched American rivals despite using inferior chips, raising fears the global dominance of U.S. tech could be under threat.

DeepSeek said last week that the performance of its latest R1 model was on par with OpenAI’s o1-mini model that the ChatGPT maker released in September. The announcement came after DeepSeek said in a late-December report that it used a cluster of more than 2,000 Nvidia chips to train its V3 model, compared with the tens of thousands of chips that are normally used for training models of a similar size.

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https://www.cnn.com/2025/01/27/tech/deepseek-stocks-ai-china/index.html