What DeepSeek’s Disruption Means For AI & Crypto Markets
By Vishakha Thakur
DeepSeek, the latest AI disruptor, has sent shockwaves through global markets as it has triggered a major sell-off in AI stocks, wiping out more than $450 billion from tech giants like Nvidia, and sent AI-focused crypto tokens into freefall. The Chinese AI company has rapidly climbed to the top, overtaking ChatGPT as the most downloaded AI app in the U.S. The way global markets have reacted to the entry of Deepseek, the big question that have hit the centre stage is…. Is DeepSeek a mere game-changer in the AI segment or a formidable challenger to America’s dominance in tech innovation?
Deepseek has forced U.S President Donald Trump to term it as a “wake-up call” for the U.S. AI firms, emphasising the need for America to remain ahead in the AI race.
On the other hand, Sam Altman, CEO of OpenAI, chose to play it rather cool when he said that, “R1 is an impressive model, especially for the price.”
What exactly is DeepSeek, and why has it captured the attention of the U.S. and global markets? Founded in December 2023 by AI enthusiast and finance expert Liang Wenfeng, DeepSeek has emerged as a formidable new player in the AI space. Wenfeng, who also serves as the CEO of the hedge fund High-Flyer, which specializes in AI-driven quantitative trading, has set his sights on challenging the dominance of U.S.-based AI models like ChatGPT.
No doubt, the U.S suspects China’s DeepSeek used AI distillation to copy U.S. models like ChatGPT raising suspicions that China is rapidly closing the gap on America’s AI leadership.
To understand the broader implications of DeepSeek’s rise, let’s go to Mr. Sunil David, a tech consultant, for his insight into how this development is reshaping the AI landscape.
Indeed, DeepSeek has positioned itself as a cost-efficient alternative to industry leaders like OpenAI’s Chatgpt.
But, what sets DeepSeek apart fr om ChatGPT?
Well, while OpenAI reportedly spent over $100 mn to train GPT-4, DeepSeek developed its flagship AI model for just $6 mn. Another major differentiator is pricing. DeepSeek’s premium plan starts at just $0.50 per month, compared to $20 per month for ChatGPT.
To understand in detail how DeepSeek’s model is different from chatGPT, Let’s turn to Dr. Utpal Chakraborty, CTO IntellAI & Gartner Ambassador- AI & Analytics.
Well, after the launch, DeepSeek not only overtook ChatGPT as the most downloaded AI app in the U.S. but markets reacted strongly, with investors reassessing their bets on AI companies that had, until now, operated in a high-cost environment.
On January 27, in the backdrop of Deepseek’s arrival, Nvidia, the backbone of AI computing, plunged 17%, losing $600 bn in market value in a single day.
DeepSeek’s disruption was not just confined to stocks as it rattled the crypto market, particularly AI-focused tokens. The AI Crypto Index dropped 13.3% with Tokens such as NEAR Protocol & ICP facing significant losses. Adding to the chaos, fake DeepSeek tokens flooded decentralized exchanges.
Let’s go to Ekta Mourya, a Crypto analyst, to understand the impact of DeepSeek on the Crypto market and the correlation between U.S Tech stocks and Crypto.
Despite the pullback, this development also presents a strong buying opportunity. The LondonCryptoClub analysts say, Bitcoin’s DeepSeek-Triggered Selloff is a buy the dip opportunity and with AI space gaining traction, there are high chances of AI projects driving in more money. As the projects become mainstream, fresh capital flows will lead to a rise in the AI agent Tokens such as $MIND, Virtuals Protocol, ai16Z and Freysa AI. So keep an eye on these tokens for significant gains.
Well, DeepSeek has done more than just create an AI model, it has triggered a market shakeup, forcing a re-evaluation of AI’s future. Whether it will continue to disrupt the status quo and challenge the U.S. dominance in this space remains to be seen. Stay tuned for more updates on this developing story.
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