Innovations revealed by a Chinese tech company are having a trillion-dollar impact on the U.S. market. High-Flyer‘s generative AI model, DeepSeek, has been used to power a top-of-the-line chatbot that is taking value away from American genAI companies.
On the surface, the DeepSeek chatbot looks like it could be a clone of OpenAI‘s ChatGPT. The two bots operate similarly, as they both possess the ability to answer questions, refine searches, and write programs.
DeepSeek’s resemblance to ChatGPT explains why it has sent shockwaves across the AI industry. The Chinese bot is producing industry-standard results despite being trained with far smaller supercomputers. The New York Times noted that AI bots are typically trained with the help of 16,000 chips, but the DeepSeek-V3 model only required about 2,000 chips.
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To make matters worse for American tech companies, DeepSeek is also more accessible than its competitors. Its open-source status enables collaborations with other developers, and its flagship chatbot can be queried without an account. In contrast, ChatGPT access is so restricted that users find workarounds to gain access.
So even though ChatGPT became a bonafide celebrity after it hit the market, DeepSeek has now stolen some of its thunder. And that’s not all: The advances in the Chinese tech sector are impeding financial progress among trans-Pacific rivals. The release of the latest DeepSeek model sent U.S. stocks into a tailspin as investors questioned whether Big Tech firms actually have control over the generative AI industry.
Bloomberg estimated that the sell-off decreased the value of American tech companies by about $1 trillion. Frequent AI investor Marc Andreessen described the stock market hit as “AI’s Sputnik moment” — a wake-up call about the technological progress made by a foreign adversary of the United States.
Will the U.S. government heed that wake-up call? The body that has come close to banning TikTok has expressed that China-controlled apps must be regulated to protect the security of Americans, but those consumers aren’t listening. Millions of users would prefer to explore the potential of buzzy Chinese social media apps like Xiaohongshu and Lemon8 rather than moving their activity to U.S.-owned platforms. DeepSeek is the latest Chinese creation to turn heads, but it won’t be the last.
