Nasdaq futures plunge amid concerns over Chinese AI
The tech sector has experienced a significant downturn following China's launch of a free ChatGPT competitor that utilizes less expensive and less advanced chips. Read Full Article at RT.com
TroibNews 
The tech industry experienced a significant downturn following the release of a free ChatGPT competitor by Chinese AI startup DeepSeek, which operates on less advanced and more affordable chips.
On Monday, DeepSeek's actions led to a ripple effect on global tech stocks, driving Nasdaq futures in Japan down by over 3% and raising alarms about the state of US technological supremacy. As of 3:23 am in New York, Nasdaq 100 futures fell by as much as 3.2%, and S&P 500 contracts were down 1.9%. In early trading in Europe, Nvidia shares listed in Frankfurt dropped roughly 7%, while stocks of Tesla, Amazon, and Meta each saw losses exceeding 2%. Additionally, shares of Dutch chip manufacturer ASML Holding NV declined by more than 8%.
The decline in stock futures followed DeepSeek's introduction of its new AI model, noted for its cost efficiency and ability to operate on less sophisticated chips compared to offerings like OpenAI’s ChatGPT.
This newly released free assistant has raised questions about the lofty valuations of companies such as Nvidia, a frontrunner in the global AI stock surge, whose chips are considered crucial for the technology’s development. “DeepSeek shows that it is possible to develop powerful AI models that cost less,” Vey-Sern Ling, managing director at Union Bancaire Privee, explained to Bloomberg. “It can potentially derail the investment case for the entire AI supply chain, which is driven by high spending from a small handful of hyperscalers.”
Founded by quant fund leader Liang Wenfeng, DeepSeek’s AI model is quickly emerging as a formidable rival to the latest products from OpenAI and Meta Platforms. Its assistant notably surpassed ChatGPT to rank as the top-rated free app on Apple's App Store in the US on Monday.
The introduction of this assistant is poised to challenge the dominance of Silicon Valley, likely altering the global tech landscape and reshaping the “AI arms race,” as remarked by Nigel Green, CEO of financial advisory deVere Group, in a CNBC interview.
According to research published by DeepSeek last month, their DeepSeek-V3 model, launched on January 10, was trained using Nvidia’s H800 chips, which reportedly cost under $6 million, as noted by Reuters. Although the H800 chips are not considered top-tier, they were initially developed as a lower-capacity alternative to circumvent sales restrictions to China before ultimately being banned under US sanctions.
“The idea that the most cutting-edge technologies in America, like Nvidia and ChatGPT, are the most superior globally, there’s concern that this perspective might start to change,” stated Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, in remarks to Reuters.
Industry experts indicate that the rise of DeepSeek signifies increasing competition in the AI arena, with potential entrants likely to develop rapidly and pose greater challenges to established firms.
Mathilde Moreau for TROIB News
On Monday, DeepSeek's actions led to a ripple effect on global tech stocks, driving Nasdaq futures in Japan down by over 3% and raising alarms about the state of US technological supremacy. As of 3:23 am in New York, Nasdaq 100 futures fell by as much as 3.2%, and S&P 500 contracts were down 1.9%. In early trading in Europe, Nvidia shares listed in Frankfurt dropped roughly 7%, while stocks of Tesla, Amazon, and Meta each saw losses exceeding 2%. Additionally, shares of Dutch chip manufacturer ASML Holding NV declined by more than 8%.
The decline in stock futures followed DeepSeek's introduction of its new AI model, noted for its cost efficiency and ability to operate on less sophisticated chips compared to offerings like OpenAI’s ChatGPT.
This newly released free assistant has raised questions about the lofty valuations of companies such as Nvidia, a frontrunner in the global AI stock surge, whose chips are considered crucial for the technology’s development. “DeepSeek shows that it is possible to develop powerful AI models that cost less,” Vey-Sern Ling, managing director at Union Bancaire Privee, explained to Bloomberg. “It can potentially derail the investment case for the entire AI supply chain, which is driven by high spending from a small handful of hyperscalers.”
Founded by quant fund leader Liang Wenfeng, DeepSeek’s AI model is quickly emerging as a formidable rival to the latest products from OpenAI and Meta Platforms. Its assistant notably surpassed ChatGPT to rank as the top-rated free app on Apple's App Store in the US on Monday.
The introduction of this assistant is poised to challenge the dominance of Silicon Valley, likely altering the global tech landscape and reshaping the “AI arms race,” as remarked by Nigel Green, CEO of financial advisory deVere Group, in a CNBC interview.
According to research published by DeepSeek last month, their DeepSeek-V3 model, launched on January 10, was trained using Nvidia’s H800 chips, which reportedly cost under $6 million, as noted by Reuters. Although the H800 chips are not considered top-tier, they were initially developed as a lower-capacity alternative to circumvent sales restrictions to China before ultimately being banned under US sanctions.
“The idea that the most cutting-edge technologies in America, like Nvidia and ChatGPT, are the most superior globally, there’s concern that this perspective might start to change,” stated Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, in remarks to Reuters.
Industry experts indicate that the rise of DeepSeek signifies increasing competition in the AI arena, with potential entrants likely to develop rapidly and pose greater challenges to established firms.
Mathilde Moreau for TROIB News
