Chinese AI DeepSeek Deep Sixes OpenAI on the App Store, Stocks Tank

Chinese AI chatbot Dipsik has displaced OpenAI’s ChatGPT as the most downloaded app on the Apple App Store and the market is freaking out. Stocks of major AI-connected companies such as NVIDIA fell on Monday morning following the news.

Dipsik released its R1 chatbot at the end of December and it took just a month for the app to claim its place at the top of the app store. On news that it peaked, shares of GPU maker NVIDIA fell 11%, Oracle dropped 8%, and Palantir fell 5% (The Kremer effect) stocks are adjusting to revelations that China can make AI faster, cheaper and as good as America’s.

The reason the market flipped out was DeepSeek-R1 It took two months It cost $6 million to build, and was trained using the cheap and low-power NVIDIA H800 GPU. It’s open source so anyone can go to a GitHub right now, fork it, and Tinker with it.

When it comes to training AI models, Silicon Valley has always said that bigger and more expensive is better. OpenAI CEO Sam Altman believes he’s building a kind of literal God on earth AGI is called and this beast will require a lot of resources to build. OpenAI’s business models must sacrifice the present to build a terrifying future in its own image.

OpenAI says it needs to steal the creative output of everyone on the planet to refine its models, and it can’t pay for them. It will have to build huge data centers to process data powered by new nuclear power plants. Meta, Anthropic and other companies are investing billions to build the infrastructure to power AI in hopes of huge returns and making a future easier and simpler for tech billionaires.

SoftBank and OpenAI teamed up with President Trump to make the announcement StargateA $500 billion AI initiative. The US passed the CHIPS Act to make sure China didn’t get the most advanced GPUs and develop AI as fast as America. Silicon Valley’s AI lords were ready to spend billions rebuilding pieces of the country and, they hoped, changing the way America works.

Six million dollars. two months NVIDIA H800 SXM5s. That’s all it takes to question this dream of the future.

“To see the DeepSeek new model, how they’ve done an open-source model that’s really efficient that computes this guess-time and is super-compute efficient, is very impressive,” Satya Nadella, Microsoft’s CEO and OpenAI business partner, said at Davos last week. . “We should take developments in China very, very seriously.”