NVIDIA and AI-Driven Stock Market Crash
NVIDIA lost nearly $600 billion in market value in just one day. Additionally, major AI-dependent companies like Google, Microsoft, Meta (Facebook), Oracle, and Broadcom have also faced losses amounting to hundreds of billions of dollars in a single day. The primary reason for this crash is the unprecedented success of the Chinese company DeepSeek. Their open-source AI model, developed with just $6 million, has delivered such powerful performance in the market that it has surpassed even organizations like OpenAI.
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| IMG: Leonardo AI |
While American tech giants invest $50 to $80 billion annually in the AI sector, DeepSeek's success has raised questions about the justification of their budgets. Although the Trump administration has announced a new $500 billion investment in AI, this decision is now under scrutiny in light of DeepSeek's $6 million model. Training a single model for Google or OpenAI costs between $100 million to $1 billion, whereas DeepSeik's model is available for free. While OpenAI charges a monthly subscription fee of $200 for using its reasoning model, DeepSeek's DeepThink R1 Modern can now be used for free.
Despite the U.S. imposing chipset sanctions on China, DeepSeek trained its model using older GPUs. Yet, its effectiveness is so high that the entire AI industry is now reconsidering its investment strategies.
Currently, DeepSeek has become the top-ranked application on the U.S. Apple App Store. Its open-source nature, free usage, and ability to rival OpenAI have made DeepSeek an overnight global sensation. From investors to everyday users, everyone is now questioning: "What is the necessity of spending billions of dollars to create AI models?"
This event is not just a stock market crash but also redefines the future of AI technology and market structures. DeepSeek's success proves that efficiency and innovative thinking can surpass the amount of money spent.
Note - The interesting thing is that at this moment, you are reading this post, which was also written using DeepSeek, as I simply commanded it to write 😃.