Stocks in Microsoft, Meta and more plunge as China launches rival AI app
Stocks in Microsoft, Meta and more plunge as China launches rival AI app
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MORE than a trillion dollars were wiped off some of the world’s biggest tech firms yesterday after markets were blindsided by a cheap Chinese AI start-up. Tech investors have been panicked after a small Chinese firm called Deepseek launched an AI model that rivals OpenAI’S ChatGPT and claimed it had been developed at a fraction of the cost.
![[Headshot of Liang Wenfeng.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/liang-wenfeng-967135069.jpg?strip=all&w=350)
The shock development by a business which few had heard of has raised questions about the dominance of US tech titans Nvidia, Microsoft, Meta and Google Parent Alphabet. Marc Andreessen, a Silicon Valley venture capitalist and now an adviser to US President Donald Trump, said that DeepSeek’s model was AI’s “Sputnik moment”.
![[DeepSeek app icon on a smartphone.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/2024-person-using-deepseek-app-967110876_424b88.jpg?strip=all&w=960)
The comment refers to the space race during the height of the Cold War when the Soviet Union stunned Western nations by successfully launching a satellite into outer space. Analysts said the gains of DeepSeek, founded by Liang Wenfeng shows China is not as far behind on AI tech advancements as was previously thought.
![[Black and white photo of W.H. Smith & Son's first shop, opened in 1792.]](https://www.thesun.co.uk/wp-content/uploads/2025/01/1792-whsmiths-first-shop-opened-966526885.jpg?strip=all&w=628)
Nvidia, which last year was briefly the world’s most valuable company, shed more than $600billion in value yesterday, down by as much as 17.8 per cent. Investors also started betting against Nvidia as DeepSeek’s new model shows what can be achieved on its cheaper, older chips.
