DeepSeek Shakes the U.S. Stock Market

On the last week of January 2025, the chipmaking company Nvidia lost almost $600 billion in market value. This came following a surprise launch of DeepSeek, a Chinese AI assistant that uses less data and at a fraction of the cost compared to currently popular AI models like those of Google or Meta. 

Mark Zuckerberg recently stated that Meta would invest up to $65 billion to expand its AI infrastructure. Trump also recently stated that up to $500 billion would be spent to build AI infrastructure in the United States.  

Meanwhile DeepSeek claimed that it had only spent about $5.6 million on their own models. 

"If it’s true that DeepSeek is the proverbial 'better mousetrap,' that could disrupt the entire AI narrative that has helped drive the markets over the last two years," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

"It could mean less demand for chips, less need for a massive build-out of power production to fuel the models, and less need for large-scale data centers."

Marc Andreessen, a businessman and former software engineer posted on Twitter: “DeepSeek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen - and as open source, a profound gift to the world.” Others are still more skeptical, calling the recent events an over-reaction.