How DeepSeek is Scaring Investors

The Chinese artificial intelligence company DeepSeek has frightened investors Monday beyond expectations as it made many refinements to the AI model.

Previously, investors anticipated the United States to dominate the AI race. Having some of the greatest technology companies like Nvidia, Google, and Microsoft which have made some of the greatest levels of investment into artificial intelligence innovations, and having also kickstarted the $500 billion joint-company Stargate, investors previously believed that the United States will take command in the global AI race.

However, the initially small company DeepSeek, which only poured $6 million into AI which pales in comparison to the likes of Nvidia's Blackwell and Google's Gemini, showed that it could shake up the AI market. Very similar to ChatGPT but with much less funding, it made AI more responsive, quick-to-reply, and broader in scope. Even better, it requires much less resources/management from the parent company in order for its continued use.

The deeply effective yet simple AI model had ripple effects across the NYSE on Monday. Nvidia fell by nearly 17%, Broadcom by 17.4%, and others also fell. Investors engaged in a massive selloff which contributed to the Nasdaq plummeting 3%.

However, DeepSeek may not be as much of a threat as previously thought. Nvidia still reigns as the largest and most established AI companies, and a $500 billion Stargate investment makes DeepSeek look sub-optimal. Nevertheless, the model will become a formidable player in the AI industry and may change the race forever.