Chinese AI threat triggers $1 trillion market panic
Chinese AI threat triggers $1 trillion market panic
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A breakthrough Chinese chatbot has sparked alarm about the country’s advances in artificial intelligence (AI) and wiped close to $1 trillion off global stock markets. A heavily-censored Chinese chatbot called DeepSeek shot to the top of Western app download charts on Monday in what was described as a “Sputnik moment” for AI.
American technology stocks tumbled in response, driven by fears that heavy-spending on AI by Silicon Valley companies that has been championed by Donald Trump will fail to yield profits for investors. California’s Nvidia, the semiconductor giant that has become the world’s most valuable company on the back of the AI boom, at one point slumped by more than $600 billion in the biggest one-day loss of value for a single company in history.
DeepSeek, a chatbot that strictly toes Beijing’s line on issues from human rights to Taiwan, is seen as the first Chinese AI to rival those developed by US tech giants such as Google, OpenAI and Facebook’s owner Meta. The Chinese AI’s inventors claim it was developed using far less computing power than rival systems and despite trade restrictions blocking China from accessing the most advanced AI supercomputer components.
President Trump’s AI tsar David Sacks said DeepSeek showed “the AI race will be very competitive”. He said: “I’m confident in the US but we can’t be complacent.”. The Prime Minister’s spokesman downplayed suggestions the UK was at risk of being left behind, saying Britain had “significant strengths in AI” and “some very strong players in the market”. Sir Keir Starmer has said the UK should become one of the “great AI superpowers”.
