Coverage dated January 26, 2025 to January 27, 2025
DeepSeek shatters beliefs about the cost of AI, leaving US tech giants reeling
Headline from The Conversation US, on the newest of 2 developments
A crash in the price of tech stocks might be an irrational panic or simply reflect correct pricing. The future costs and benefits of AI are uncertain.
The Conversation US's own description from its feed. We collect headlines and these descriptions, not full articles; read the original reporting below.
Tech stocks, especially those linked to artificial intelligence plunged on Monday due to speculation around the possible impact of a breakthrough made by Chinese startup DeepSeek.
The Nasdaq dropped as tech stocks, inflated for months by the rise of artificial intelligence, took a dive. The trigger was rival Chinese AI company DeepSeek.
The shock to financial markets came from China, where a company called DeepSeek said it had developed a large language model that can compete with US giants but at a fraction of the cost.
DeepSeek released an open-source artificial intelligence model in December after saying that it took only two months and less than $6 million to create.
Shares in major technology companies leading the artificial intelligence (AI) race took a tumble Monday morning amid investor concern about a new Chinese AI model with growing popularity. Nvidia, the powerhouse chipmaker fueling the AI boom, saw its shares drop 18 percent by market close Monday.
The same tech companies that have benefitted from the AI frenzy in the past year were getting pummeled before markets even officially opened on Monday.
