He shocked the US market, but did he change AI to China?

US President Donald Trump was only in service when a new app for artificial intelligence of China (AI), called Deepseek, shakes the Silicon Valley.

During the night, Deepseek-R1 shot himself to the top of the Apple charts as the most strained free app in the US.

The company said that at the time his new chatbot rivals Chatgpt. Not only that. They claimed it was just a development faction.

These claims-the sudden jump in the application of popularity-erased $ 600 billion (£ 446 billion) or 17% discount on the market value of chip giant NVIDIA, noting the largest one-day loss for a single action in the history of the US stock market.

Several other AI technological stocks were also caught in the decline.

Deepseek also questioned the American dominance of AI. Until then, China seemed to have fallen behind the United States. Now it seemed that China was catapulted in the foreground.

Risk capitalist Mark Andresen referred to the arrival of Depepeek-R1 as “the moment of Sputnik of AI”, a reference to the Soviet satellite, which launched the space race between the US and the USSR more than half a century earlier.

It’s been six months since Deepseek stunned the world.

Today, the breakthrough app in China has largely dropped out of the titles. This is no longer the hot topic at Happy Hour here in San Francisco. But the Deepseek has not disappeared.

Deepseek has sparked some key assumptions about AI, which were supported by US leaders such as Sam Altman, CEO of Chatgpt Producer Openai.

“We were on the road where the bigger one was considered better,” according to Sid Sheth, CEO of the AI Chip Startup D-Matrix.

Perhaps maximum maximization of data centers, servers, chips and electricity to fulfill all this was not the way forward.

Although Depepeek obviously does not have access to the most powerful technologies available at the time, Sheeh told the BBC that he shows that “with more engineering engineering, you can actually build a capable model.”

The tide of interest in Depepeek has started over the weekend in late January, before the corporate IT staff can move to stop employees flowing to it.

When organizations caught up next Monday, many have encountered to ban workers from using the app, as worries are created whether consumer data are potentially shared with the People’s Republic of China, where Deepseek is based.

But while the exact numbers are not available, many Americans still use Deepseek to this day.

Certain start-ups in the silicone valley have chosen to stick to Deepseek instead of more expensive AI models than US companies in an attempt to reduce costs.

An investor told me about money -related companies, the savings saved, and they continue to use Deepseek, help pay for critical needs, such as an additional number of staff.

However, they are careful.

In online forums, users explain how to Run Deepseek-R1 on your own devices Instead of online, using Deepseek servers in China – a solution that they think they can protect their data from sharing secretly.

“This is a good way to use the model without worrying about what is exfilting,” said Christopher Cannes, CEO of Mill Pond Research.

The arrival of Deepseek also marks a turning point in the rivalry of American-China Ai, some experts say.

“China has been seen as a game of catching up in large language models so far, with competitive models, but it is always lagging behind the best Western,” said policy analyst Wendy Chang of the Mercator Institute for China for the BBC.

A large language model (LLM) is a reasoning system trained to predict the next word in a sentence or phrase.

Deepseek changed the perceptions when it is claimed to have achieved a leading model for some of the computing resources and expenses common to his American counterparts.

Openai had spent $ 5 billion ($ 3.7 billion) in 2024 alone. In contrast, Deepseek researchers said they had developed Deepek-R1-which came to Openai’s top at Openai.

“Deepseek revealed the competitiveness of AI’s Chinese landscape for the world,” Chang said.

AI American developers have been able to take advantage of this shift.

Transactions related to AI and other messages Trumpet The Trump administration and large US technology companies are often framed as critical for staying in China.

Trump’s AI Car David Sacks noted that the technology will have “deep consequences for both the economy and for the national security” when the administration discovered His AI action plan last month.

“It’s just very important for America to continue to be the dominant force in AI,” Saxe said.

Deepseek has never been able to extinguish concerns about the effects of security of its Chinese origin.

The US Government evaluates the company’s connections with Beijing, as reported for the first time by Reuters In June.

A senior US Department of State official told the BBC that they have learned that “Deepseek is ready to provide and likely to continue to provide China’s military and intelligence operations.”

Deepseek did not respond to the BBC’s request for comment, but the company’s confidentiality policy states that its servers are located in the People’s Republic of China.

“When you have access to our services, your personal data can be processed and stored in our servers in the People’s Republic,” the policy He saysS “This may be a direct provision of your personal information about us or a transfer that we or a third party make.”

Earlier this week, Openai returned to talk about Deepseek after launching a pair of AI models.

These were the first free and open versions – which means they could be downloaded and modified – issued by the US GIANT AI for five years, long before Chatgpt was introduced into the consumer AI era.

“You can draw a straight line from Deepseek to what Openai has announced this week,” SHETH told D-Matrix.

“Deepseek has proven that the smaller, more efficient models can still achieve impressive results -and this changed the thinking of the industry,” Shet told the BBC. “What we see now is the next wave of this thinking: a shift to right-sized models that are faster, cheaper and ready to deploy scale.”

But for others, for the big American players in AI, the old approach seems alive and well.

Just days after the free models are launched, Openai introduced the GPT-5. On the eve, the company said It significantly increased its calculation capacity and AI infrastructure.

Briefly messages For the new data center Clusters needed for AI come as US technology companies compete for the highest level of AI talent.

Meta CEO Mark Zuckerberg is plowed billions of dollars to fulfill his AI ambitions and I tried to lure the staff of rivals with $ 100 million packets to payS

Coating the technology giants seemed more related than ever to engage in the costs of AI, as can be seen from the series of blowing results revealed last season of technology profits.

In the meantime, Nvidia’s shares, which have immersed themselves just after the depepeek arrives, have recovered – touching new peaks that made it the most valuable company in history in the world.

“The original story turned out to be a little red herring,” Mill Pond Research said.

We have returned to a future where AI will depend on more data centers, more chips and more power.

In other words, the shaking of the status quo depepeek did not continue.

And what about Deepseek himself?

“Deepseek is now facing challenges that support her inertia,” says Marina Gian, an associate professor at Sydney Technical University.

This is partly due to operational failures, but also to intensive competition from companies in the US and China, she said.

Gian notes that the next product of the company, Depepeek-R2, has slowed down. One reason? Lack of high -end chips.