Chinese AI Startup DeepSeek Shakes the World
DeepSeek, a Chinese artificial intelligence startup that has recently been in the global spotlight, has shaken up the American technology sector. The emergence of this startup has caused huge financial losses for technology giants, with Elon Musk losing almost $90 billion (about ₹7.9 lakh crore) within a month. The net worth of Nvidia and Meta's CEO also suffered greatly.
Billionaires' Wealth Eroded in February
At the beginning of 2024, the total wealth of the world's billionaires rose by $314 billion, a sum equivalent to the salaries of 15 million workers for a year. But these gains were fleeting for some billionaires.
- Elon Musk: His fortune fell from $433 billion in early February to $349 billion at the end of the month, erasing almost $90 billion in wealth.
- Nvidia CEO Jensen Huang: Lost $20 billion.
- Meta CEO Mark Zuckerberg: Lost $11 billion from his net worth.
- Oracle Chairman Larry Ellison: Lost $27.6 billion, sending him from third to fifth place in the list of the world's richest individuals.
- Google Co-Founder Larry Page: Lost $6.3 billion from his net worth.
DeepSeek's Free AI Model Disrupts the Market
DeepSeek, a Hangzhou, China-based AI research firm, was established in 2023 by Liang Wenfeng. The company recently released DeepSeek R1, a sophisticated AI model provided entirely for free.
In contrast to OpenAI and CloudSonet, which charge users for AI subscriptions, DeepSeek's free access model has intrigued the international market. Consequently, it has quickly gained popularity, posing a threat to established AI companies.
Impact on the US Tech Industry
DeepSeek has greatly influenced the US technology sector by creating AI models that operate on less advanced chips than Nvidia's top-of-the-line processors. This news caused a drastic drop in the stocks of top tech firms, including:
- Nvidia
- Microsoft
- Meta
- Oracle
- Tesla
Nvidia, specifically, took a huge hit, losing $600 billion in market value. This is the biggest loss in such a short time in US stock market history.
DeepSeek's meteoric rise has triggered apprehension among the American technology monopolies, with indications that this will change the international AI narrative. With an escalating battle between competitors, enterprises will have to respond to the changing market environment to maintain their reign.
