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Prospect of cheaper, more efficient AI model rattles market

Published 1 month ago1 minute read

Artificial intelligence

Prospect of cheaper, more efficient AI model rattles market and industry

20250128 Deepseek

China's DeepSeek offers cheaper AI inference services than U.S. rivals. © Reuters

January 28, 2025 19:56 JST

HONG KONG/TAIPEI -- Chinese companies may have felt a sense of satisfaction as they watched compatriot DeepSeek crash Nvidia's stock price, remembering a time two years ago when another American AI company, OpenAI, took the world by storm.

Excitement over DeepSeek, whose chatbot has topped the free app charts for iPhone in the U.S., helped wipe nearly $600 billion off the market capitalization of chip developer Nvidia overnight in New York, the largest single-day drop in U.S. stock market history, amid fears that the days of massive spending on AI-related hardware may be coming to an end.

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