DeepSeek’s sudden rise raised concerns that US dominance over semiconductors and AI was fading and that China’s ascendance was all but certain. The fact that DeepSeek’s models were cheaper yet still just as high-performing suggested that fewer, not more, chips would be needed. This, if true, will have dealt a severe blow to the fortunes of major chip players like Nvidia.
Just over a year ago, Chinese AI start-up DeepSeek spooked markets. The Jan 20, 2025, release of the flagship R1 model took the world by storm, sending its iOS app to the top of Apple’s App Store in the US.
That was just the beginning. DeepSeek’s runaway success triggered a massive sell-off in US AI-related stocks a week later, on Jan 27, 2025. The rout wiped about US$600 billion ($761 billion) off Nvidia’s market value. Founder and CEO Jensen Huang was not spared, with his net worth sliding nearly 20% to around US$100 billion from US$121 billion.
