China’s DeepSeek Trillion-Dollar Jolt to U.S. Tech Stocks

China launched its DeepSeek AI (Artificial Intelligence) model R1 this week and turned down U.S. stock markets. As per the report, China’s DeepSeek is more cost-effective than U.S. ChatGPT. The representatives from many countries applauded the Chinese breakthrough in AI. However, some news outlets share privacy and cybersecurity concerns using the cost-effective DeepSeek app.

China’s advancement in AI is significant and could help China’s global growth and dominance. DeepSeek’s latest R1 release has three main highlights: firstly, the low-cost training and modeling technology, and secondly, an open-source solution instead of proprietary data and training. Third, the effect of the USD 6 million AI chatbot app model on U.S. market stock shock close to USD 1$ Trillion. The U.S. market saw a correction in the following days; however, all these paradigm shifts were observed even after a performance GPU export ban to China to have a competitive advantage in U.S. Tech. One may argue about data sovereignty for practical local model training. Still, with minimal to low regulation in this niche technology, data privacy may only impact a brief set of applications for Artificial Intelligence on personal recommendations.

Furthermore, some reports suggested DeepSeek instrumented the capability by sourcing older generation processors from Nvidia right before the chip ban and calibrating them to outperform existing Large Learning Models (LLMs). To provide the readers with a comparison, Bloomberg’s famous financial model comprises 50 billion parameters, and Open AI’s ChatGPT 3.5 comprises of 175 billion parameters. In contrast, DeepSeek R1 works on an impressive 671 billion parameters, while ChatGPT 4 is reported to have 1.6 trillion parameters. DeepSeek investment by different sources is still assessed at one-fourth of Open AI’s popular AI model ChatGPT.  Furthermore, DeepSeek-R1 works on time-testing methodology, generating better inferences while analyzing the problem or now prompts. White House was in action as evidenced by President Trump’s private meeting with Nvidia CEO, Jensen Huang, on Friday January 31, 2025. Open AI’s ChatGPT founder, Sam Altman, is on a trip to Japan to collaborate with SoftBank CEO Masayoshi Son, to contribute to Japan’s AI thrust and will be meeting Japanese Prime Minister Shigeru Ishiba on Monday, February 3rd, 2025. Meanwhile, India also announced USD 1.27 billion investment for AI research.

Artificial Intelligence technology has the potential to touch every aspect of our lives, and thus, this can be seen as the start of a new tech race in this “lukewarm” world era.