Economy Chinese startup DeepSeek hammers US stocks with cheaper open-source AI model

[Sweater of AV]

Chinese app DeepSeek hammers US stocks with cheaper open-source AI model

DeepSeek, a new Chinese AI chatbot startup is receiving new attention from Silicon Valley after a surprising launch. It drove U.S. tech shares lower on Monday.

www.foxbusiness.com

U.S. tech shares tumbled on Monday after the popularity of Chinese AI startup DeepSeek raised concerns among investors over American dominance in the sector. The tech-heavy Nasdaq Composite plunged more than 2.6% in early trading. The Dow Jones Industrial Average was down more than 100 points and the S&P 500 was down more than 1.5%.

DeepSeek is gaining attention in Silicon Valley as the company appears to be nearly matching the capability of chatbots like OpenAI's ChatGPT, but at a fraction of the development cost....

Unlike ChatGPT and other major AI competitors, DeepSeek is open-source, allowing developers to offer their own improvements on the software. The company unveiled R1, a specialized model designed for complex problem-solving, on Jan. 20, which "zoomed to the global top 10 in performance," and was built far more rapidly, with fewer, less powerful AI chips, at a much lower cost than other U.S. models, according to the Wall Street Journal.

Meta's Chief AI scientist, Yann LeCun, took to social media to speak about the app and its rapid success. He pointed out in a post on Threads, that what stuck out to him most about DeepSeek's success was not the heightened threat created by Chinese competition, but the value of keeping AI models open source, so anyone could benefit. "It's not that China's AI is ‘surpassing the US,’ but rather that ‘open source models are surpassing proprietary ones,’" LeCun explained.

 

[TeTe]

More reverse engineered trash. Probably stole Nvidia chips to build it.

Good luck to anyone who downloads that.

 

[Sweater of AV]

And of course DeepSeek is now dealing with security issues.

https://www.cnbc.com/2025/01/27/deepseek-hit-with-large-scale-cyberattack-says-its-limiting-registrations.html

DeepSeek on Monday said it would temporarily limit user registrations “due to large-scale malicious attacks” on its services.

 

[Andy Capp]

More reverse engineered trash. Probably stole Nvidia chips to build it.

Good luck to anyone who downloads that.

Maybe, but it's also innovative.

A deep dive into DeepSeek's newest chain of though model

El Reg digs its claws into Middle Kingdom's latest chain of thought model

www.theregister.com

According to these guys, it offers improved performance and a much lower cost. I wouldn't use Chinese tech like that anyway, but if your only goal is cheap and fast, it's apparently a good solution.

 

[SandisLL]

More reverse engineered trash. Probably stole Nvidia chips to build it.

Good luck to anyone who downloads that.

AI is ML called in more modern name.

Yes, with 28 nm chips it is doable...you just will need more chips than if you will use 7 nm etc crap.
Aerospace usually anyways doesn't use even 22 nm litography for radiation hardened chips... does not use...

Other stuff is what kind of bacdoors etc chinesse will build in modules ( in programms ) and etc....

Most modern radiation hardened chips are using 130 nm tech process litography...

 

[Zazen]

Why is tech news in the war room?

 

[nixkid]

I mentioned DeepSeek in the other AI thread. The model itself is much more efficient than anything comparable.

Those GPUs export restrictions may have backfired. It forced the Chinese to innovate in ways that American companies didn't have to.

 

[Pliny Pete]

Why is tech news in the war room?

Maybe you should ask DeepSeek

 

[Sweater of AV]

Why is tech news in the war room?

Many reasons. Most simply, did you notice the "Economy" tag? You're asking why people would discuss the economy and one of its biggest sectors in the War Room?

 

[chardog]

More reverse engineered trash. Probably stole Nvidia chips to build it.

Good luck to anyone who downloads that.

it's number 1 on the app store, I've been trying to get in, but too much traffic, it cant handle.

it's open source

it costs a fraction to build, so while nvidia is getting hammered, it might be ok, but chatgpt/openai/copilot/grok, all endangered bigly

 

[rj144]

The stock market is doing great under Trump so far.

 

[RoastBeast]

Sounds like a great time to buy the dip when people realize Harbor Freight AI, complete with Chinese surveillance, isn't the way to go.

Then again people are dumb so I could be wrong.

 

[CantCucktheTuck]

way too early to be drawing any conclusions on this, but historically, China isn't known for it's innovation.

 

[PEB]

And of course DeepSeek is now dealing with security issues.

https://www.cnbc.com/2025/01/27/deepseek-hit-with-large-scale-cyberattack-says-its-limiting-registrations.html

DeepSeek on Monday said it would temporarily limit user registrations “due to large-scale malicious attacks” on its services.

Not surprising given that so much of Silicon Valley needs for this to fail. It's open source an using Microsoft backed Github. You think they want this to succeed?

The problem is small memory models run on PC if they use their big 670 billion parameter models no one will use OpenAI or XAI expensive servers. I said as Steve Jobs quoted think different.

If it doesn't know something it goes out a parse the net. Google been doing this for years in a leser extent. What drives me nuts is always they insinuate that China with little actual proof steal technology.

Yes in the past China had people working at key companies to steal technology. Why don't nvent something that works on a smaller footprint? Microsoft CEO Satya Nadella admitted it was really amazing the way it generates the model.

He not running around with his hair on fire like Sam Altman an Elon Musk. Musk defended Sam Altman lol he is supposedly in court with OpenAI? Those sweet trillions are on the line.

 

[Evbo]

way too early to be drawing any conclusions on this, but historically, China isn't known for it's innovation.

Yeah, but it's great at other people's innovation, so...

 

[Andy Capp]

Yeah, but it's great at other people's innovation, so...

I repeat,

Maybe, but it's also innovative.

A deep dive into DeepSeek's newest chain of though model

El Reg digs its claws into Middle Kingdom's latest chain of thought model

www.theregister.com

According to these guys, it offers improved performance and a much lower cost. I wouldn't use Chinese tech like that anyway, but if your only goal is cheap and fast, it's a good solution, judging by this.

Say, how are those electric car prices coming along, by the way? Do you think they're going to get any better now that Trump has effectively pulled all incentives for them in the US? Even if he imposes a tariff that triples the price of that new one (whose name escapes me at the moment) it will still be cheaper than most, or maybe even all, US-manufactured EVs. All such a tariff would do is hurt the consumer. It wouldn't make American manufacturers more competitive; it would be just the opposite. American manufacturers would be crazy to even try making electric cars if they have to choose between losing money to keep the price down or charging so much for their cars no one will buy them.


Edit: please don't characterize me as defending or promoting the interests of China. I'm just correcting the record.

 

[nixkid]

way too early to be drawing any conclusions on this, but historically, China isn't known for it's innovation.

You're behind the times, bigly. That nonsense "they can't innovate" argument might have had a leg to stand on 20 years ago. But not today.

They have the cheapest EVs (BYD), the best consumer drones (DJI), the best 3D printers (Bambu Labs), are doing innovative things in AR (XReal), etc.

 

[CantCucktheTuck]

You're behind the times, bigly. That nonsense "they can't innovate" argument might have had a leg to stand on 20 years ago. But not today.

They have the cheapest EVs (BYD), the best consumer drones (DJI), the best 3D printers (Bambu Labs), are doing innovative things in AR (XReal), etc.

Aren't those the cars that are known for spontaneously blowing up?

 

[USA!USA!]

I would never use it but I think its cool there is competition. Maybe not for investors lol

I have heard that they are doing it with nvidia chips that they actually aren't supposed to have.. is that true?

 

[gentel]

China may have a reputation for copying, but ML is a particularly math-heavy discipline of computer science and China has a lot of talented math students