AI Innovation Shakes the Market, DeepSeek Challenges Traditional AI Giants

Recently, a notable event occurred in the AI field. A Chinese AI large model named DeepSeek has surpassed ChatGPT in download numbers on the US app store for the first time, attracting widespread attention from the global technology and investment community. This breakthrough not only evokes thoughts of a potential reshaping of the future global technology landscape but also triggered a brief panic in the US capital markets.

As a result, the stock prices of several tech giants have seen significant declines. Companies such as NVIDIA, ARM, Broadcom, and TSMC have all experienced varying degrees of decline, with drops ranging from 4.5% to 5.5%. Even Nasdaq 100 futures have seen a substantial drop, likely to set a record for the largest single-day decline in recent times. It is estimated that the U.S. stock market may have evaporated more than $1 trillion in market value during that day's trading, equivalent to one-third of the total market value of the cryptocurrency market.

The cryptocurrency market has not escaped this wave of decline either. The price of Bitcoin has fallen below the $100,000 mark, with a 24-hour drop of 4.48%. Ethereum has also dropped below $3,200, with a 24-hour decrease of 3.83%. This sudden market volatility has left many investors feeling confused, with some speculating that it may be related to changes in expectations for interest rate cuts by the Federal Reserve or other macroeconomic factors.

So, why has the rise of DeepSeek triggered such a significant market response? The key lies in its disruption of the traditional AI development model. Unlike companies like OpenAI and Meta, DeepSeek has not developed through substantial capital and massive hardware resources. In contrast, DeepSeek was founded less than two years ago, has only 200 employees, and its development costs are under 10 million dollars, yet its performance is comparable to, if not superior to, that of industry giants.

This efficient and low-cost development model has sparked deep reflection in the industry. An executive from DropBox commented on social media that this is a typical case of disruptive innovation. Traditional companies are optimizing existing processes, while disruptors are rethinking fundamental approaches. The DeepSeek team posed a revolutionary question: What if we do this smarter, rather than simply investing in more hardware?

In fact, DeepSeek's success challenges several traditional notions, including that Chinese companies can only do closed-source code, that Silicon Valley is the global AI center, and that developing top AI models requires huge investments. They reduced the model training cost from $100 million to $5 million, the number of GPUs needed from 100,000 to 2,000, and cut API costs by 95%, even making it possible to run on ordinary gaming GPUs.

Industry experts believe that the success of DeepSeek represents a victory for open source over closed source, which will promote the prosperity and development of the entire open source community. At the same time, it also brings new possibilities for AI applications, as private deployment and autonomous fine-tuning will provide greater development space for downstream applications.

However, experts also point out that this does not mean that traditional AI giants will lose their advantages. With continuous technological advancements, the competition between closed-source and open-source models may continue to ebb and flow. Furthermore, the demand for computing power is expected not to decrease; rather, it may increase overall due to the proliferation of technology, similar to the development patterns of other technological innovations in history, such as the steam engine.

Overall, DeepSeek's groundbreaking advancements not only change people's understanding of the trajectory of AI development but may also have a profound impact on the entire AI industry. As technology continues to evolve, we can expect to witness richer AI chip products and a more prosperous application ecosystem in the next year or two.