What is DeepSeek and How is it Influencing the Market
- Justin Zhao
- Jan 29
- 1 min read
DeepSeek, a Chinese artificial intelligence (AI) company, launched its newest version, DeepSeek-R1, Jan. 20. Challenging other AI companies like OpenAI and Meta, DeepSeek has set a new benchmark for AI development. DeepSeek has overtaken OpenAi’s ChatGPT as the best rated free application on the IOS Apple App Store.
What really is DeepSeek?
Founded by Liang Wenfeng in 2023, DeepSeek quickly gained traction with their inexpensive development of large-scale language models (LLMs) and AI-powered applications. Before DeepSeek’s R1 version, they launched three previous models that quickly developed to the code they run today. Based out of Hangzhou, China, Liang and his team have built this company with an investment of $6 million dollars. This is a fraction of OpenAI’s investment of $540 million and Meta’s $38 billion in 2024.
DeepSeek’s impact on the markets.
The emergence of the Chinese AI startup has had a profound impact on the global technology market, specifically Nvidia. Jan. 27 saw Nvidia’s stock plummet nearly 17%, double of their last single-day loss in the market. Losing $589 billion in market capitalization, Nvidia broke a new record with their historic decline.
In a previous document, DeepSeek claimed their development for version V3 required less than $6 million worth of computing power from Nvidia H800 chips. This downturn was driven by concerns that DeepSeek’s AI models could reduce the demand for high-end GPUs, a dominant sector for Nvidia. Other major companies like Alphabet, Microsoft, and Oracle experienced noticeable stock delines. DeepSeek’s presence in the AI field has stirred panic and disruption in a prominent market.
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