DeepSeek's new AI shreds tech markets by $1.2 trillion

January 27,长沙USDT兑换比率 2025  18:00

The launch of Chinese startup DeepSeek's latest AI model has sent tech stocks in the US and Europe tumbling, wiping out $1.2 trillion from their combined market caps. Investors have begun to question the inflated valuations of major corporations like Microsoft, Meta, and Alphabet amid growing competition in the AI ​​sector.

DeepSeek's App Store Domination and Threat to the Giants

DeepSeek's latest free AI model has risen to the top of the App Store charts in a matter of days, displacing expensive solutions like OpenAI. Users have praised the model's high performance and transparency, which makes it easy to analyze and interpret user queries.

DeepSeek's breakthrough calls into question the wisdom of leading corporations' multi-billion-dollar investments in AI. This is especially true amid growing criticism over the cost of AI infrastructure, the dominance of hyperscalers, and the cost of the technology.

Market Impact: Nvidia and the Tech Sector in Europe

Nvidia, the largest supplier of AI chips, has felt the effects of this market shift the hardest. Its shares have fallen more than 10% in pre-market trading, wiping out $340 billion in market value.

Nasdaq 100 futures also fell 5.2%, although they have since recovered some of their gains. In Europe, stocks such as ASML Holding NV fell 12%, becoming some of the biggest losers. Market volatility has spiked, with the VIX rising to 21.5.

Expert Comment: Cheap AI is a Game Changer

Experts say the emergence of powerful yet affordable solutions like DeepSeek is changing the dynamics of the market. “DeepSeek proves that high-quality AI can be created without significant investment. This threatens the entire AI supply chain, which is built on large capital investments,” said Wei-Sern Ling, managing director of Union Bancaire Privée.

This view is shared by other analysts, who point out that the growing popularity of cheaper technologies could reduce the profitability of major players.

Support in China and new prospects

While Western companies have seen their stocks fall, the Chinese market has responded positively to DeepSeek’s success. Shares of Merit Interactive, one of the companies that collaborates with DeepSeek, rose to their daily limits. The Hang Seng Tech Index also strengthened by 2% ahead of the Lunar New Year holidays.

DeepSeek’s success raises an important question: are Western approaches to AI development really worth the huge investment? Using open-source technology and more accessible solutions could become the new norm, experts say. The emergence of DeepSeek has not only challenged the American giants, but also changed the perception of global leadership in the field of AI. This breakthrough proves that Chinese companies are able to compete with their Western counterparts by offering effective and affordable solutions. This raises serious questions about the future of the AI ​​industry and the prospects of the market as a whole.