Investing.com -- Emerging Chinese startup DeepSeek disrupted the AI race with its lightweight, open-source R1 assistant. The tool, launched on January 20, challenges established players like OpenAI with minimal computing resources, costing just $5.6 million to train compared to OpenAI’s estimated $100 million for GPT-4.
DeepSeek download surge led it to the top at Apple (NASDAQ: AAPL )'s App Store, which coincided with sharp declines in AI-related stocks, including the Magnificent Seven technology giants.
DeepSeek's launch is called the AI’s “Sputnik moment,” which has the potential to reshape global competition. With DeepSeek’s model offering smaller, cost-effective designs, experts note that the technology could become more accessible worldwide, possibly diminishing the importance of billion-dollar hardware clusters.
With DeepSeek’s breakthrough there is a chance of AI models becoming commoditized. The breakthrough also spotlights Chinese innovation resilience despite US chip restrictions.
With the drop in share of AI related stock, analysts question what the investors are asking, the long-term value of costly, hardware-dependent AI models.