US chip-maker Nvidia led a rout in tech stocks Monday after the emergence of a low-cost Chinese generative AI model that could threaten US dominance in the fast-growing industry.

The chatbot developed by DeepSeek, a startup based in the eastern Chinese city of Hangzhou, has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.

Shares in Nvidia, whose semiconductors power the AI industry, fell more than 15 percent in midday deals on Wall Street, erasing more than $500 billion of its market value.

The tech-rich Nasdaq index fell more than three percent.

AI players Microsoft and Google parent Alphabet were firmly in the red while Meta bucked the trend to trade in the green.

DeepSeek, whose chatbot became the top-rated free application on Apple’s US App Store, said it spent only $5.6 million developing its model – peanuts when compared with the billions US tech giants have poured into AI.

US “tech dominance is being challenged by China,” said Kathleen Brooks, research director at trading platform XTB.

The focus is now on whether China can do it better, quicker and more cost effectively than the US, and if they could win the AI race,” she said.

US venture capitalist Marc Andreessen has described DeepSeek’s emergence as a “Sputnik moment” – when the Soviet Union shocked Washington with its 1957 launch of a satellite into orbit.

As DeepSeek rattled markets, the startup on Monday said it was limiting the registration of new users due to “large-scale malicious attacks” on its services.

Meta and Microsoft are among the tech giants scheduled to report earnings later this week, offering opportunity for comment on the emergence of the Chinese company.

Shares in another US chip-maker, Broadcom, fell 16 percent while Dutch firm ASML, which makes the machines used to build semiconductors, saw its stock tumble 6.7 percent.

Investors have been forced to reconsider the outlook for capital expenditure and valuations given the threat of discount Chinese AI models,” David Morrison, senior market analyst at Trade Nation.

These appear to be as good, if not better, than US versions.”

Wall Street’s broad-based S&P 500 index shed 1.7 percent while the Dow was flat at midday.

In Europe, the Frankfurt and Paris stock exchanges closed in the red while London finish flat.

Asian stock markets mostly slid.

Just last week following his inauguration, Trump announced a $500 billion venture to build infrastructure for AI in the United States led by Japanese giant SoftBank and ChatGPT-maker OpenAI.

SoftBank tumbled more than eight percent in Tokyo on Monday while Japanese semiconductor firm Advantest was also down more than eight percent and Tokyo Electron off almost five percent.

  • CubitOom@infosec.pub
    link
    fedilink
    English
    arrow-up
    82
    arrow-down
    1
    ·
    1 year ago

    It only cost $5 million to blow out $500 billion from the stock market.

    All hail open source.

  • IHeartBadCode@fedia.io
    link
    fedilink
    arrow-up
    76
    ·
    1 year ago

    fell more than 15 percent in midday deals on Wall Street, erasing more than $500 billion of its market value

    If I’m reading this correctly, that would mean that NV was previously valued at ~$3.4T??

    Yeah, they might be a bit overvalued. Just hint.

  • UnderpantsWeevil@lemmy.world
    link
    fedilink
    English
    arrow-up
    58
    arrow-down
    14
    ·
    1 year ago

    The number of people repeating “I bet it won’t tell you about Tianamen Square” jokes around this news has - imho - neatly explained why the US tech sector is absolutely fucked going into the next generation.

      • Not_mikey@slrpnk.net
        link
        fedilink
        arrow-up
        16
        arrow-down
        3
        ·
        1 year ago

        It’s even worse / funnier in the app, it will generate the response, then once it realizes its about Taiwan it will delete the whole response and say sorry I can’t do that.

        If you ask it “what is the republic of china” it will generate a couple paragraphs of the history of China, then it’ll get a couple sentences in about the retreat to Taiwan and then stop and delete the response.

        • Womble@lemmy.world
          link
          fedilink
          English
          arrow-up
          16
          ·
          1 year ago

          In fairness that is also exactly what chatgpt, claude and the rest do for their online versions too when you hit their limits (usually around sex). IIRC they work by having a second LLM monitor the output and send a cancel signal if they think its gone over the line.

          • JasSmith@sh.itjust.works
            link
            fedilink
            arrow-up
            7
            arrow-down
            4
            ·
            1 year ago

            Okay but one is about puritanical Western cultural standards about sex, and one is about government censorship to maintain totalitarian power. One of these things is not like the other.

            • 小莱卡
              link
              fedilink
              English
              arrow-up
              3
              arrow-down
              3
              ·
              1 year ago

              Sorry that a chinese made model doesn’t parrot US state dept narratives 😞

        • Womble@lemmy.world
          link
          fedilink
          English
          arrow-up
          6
          arrow-down
          2
          ·
          1 year ago

          Maybe they should have been clearer than saying people were joking about it doing something that it actually does if they wanted to make a point.

          • Bronzebeard@lemm.ee
            link
            fedilink
            English
            arrow-up
            7
            arrow-down
            4
            ·
            1 year ago

            People caring more about “China bad” instead of looking at what the tech they made can actually do is the issue.

            You needing this explicitly spelled out for you does not help the case.

            • ikt@aussie.zoneBanned from community
              link
              fedilink
              English
              arrow-up
              1
              ·
              1 year ago

              ngl I’m still confused

              what the tech they made can actually do

              It’s AI, it does AI things, is it because China can now do the things we do (coding/development/search queries etc) that are just as good as America that it’s a problem?

              • Bronzebeard@lemm.ee
                link
                fedilink
                English
                arrow-up
                2
                ·
                1 year ago

                It has nothing to do with it being China. They just figured out how to do it more efficiently and with lower powered chips, meaning nvidia’s market dominance in high end chips that they could charge whatever they wanted for just for is legs cut out from under them. If you don’t need as many to run AI, Nvidia won’t sell as many.

                • ikt@aussie.zoneBanned from community
                  link
                  fedilink
                  English
                  arrow-up
                  1
                  ·
                  1 year ago

                  So the idea with this comment:

                  The number of people repeating “I bet it won’t tell you about Tianamen Square” jokes around this news has - imho - neatly explained why the US tech sector is absolutely fucked going into the next generation.

                  is that people have misplaced their concern, not at the fact that it’s censored but that the US has lost the technology high ground and won’t get it back for at least a generation?

        • ikt@aussie.zoneBanned from community
          link
          fedilink
          English
          arrow-up
          4
          arrow-down
          2
          ·
          1 year ago

          I’m slow, what’s the point? how does people joking about the fact China is censoring output explain

          why the US tech sector is absolutely fucked going into the next generation

          • 小莱卡
            link
            fedilink
            English
            arrow-up
            2
            ·
            1 year ago

            Because they care more about the model not parroting US state dept narratives than the engineering behind it.

      • SmokeyDope@lemmy.world
        link
        fedilink
        English
        arrow-up
        7
        arrow-down
        2
        ·
        edit-2
        1 year ago

        Try an abliterated version of the qwen 14b or 32b R1 distills. I just tried it out they will give you a real overview.

        Still even when abliterated its just not very knowledgeable about “harmful information”. If you want a truly uncensored model hit up mistral small 22b and its even more uncensored fine tune Beepo 22b

      • Scolding7300@lemmy.world
        link
        fedilink
        arrow-up
        2
        arrow-down
        1
        ·
        1 year ago

        That’s just dumb. It at least doesn’t suppress that when provided with search results/refuses to search (at least when integrated in Kagi)

        • Womble@lemmy.world
          link
          fedilink
          English
          arrow-up
          19
          ·
          1 year ago

          ??? you dont use training data when running models, that’s what is used in training them.

            • Womble@lemmy.world
              link
              fedilink
              English
              arrow-up
              35
              arrow-down
              1
              ·
              1 year ago

              Wow ok, you really dont know what you’re talking about huh?

              No I dont have thousands of almost top of the line graphics cards to retain an LLM from scratch, nor the millions of dollars to pay for electricity.

              I’m sure someone will and I’m glad this has been open sourced, its a great boon. But that’s still no excuse to sweep under the rug blatant censorship of topics the CCP dont want to be talked about.

              • UnderpantsWeevil@lemmy.world
                link
                fedilink
                English
                arrow-up
                5
                arrow-down
                23
                ·
                1 year ago

                No I dont have thousands of almost top of the line graphics cards to retain an LLM from scratch

                Fortunately, you don’t need thousands of top of the line cards to train the DeepSeek model. That’s the innovation people are excited about. The model improves on the original LLM design to reduce time to train and time to retrieve information.

                Contrary to common belief, an LLM isn’t just a fancy Wikipedia. Its a schema for building out a graph of individual pieces of data, attached to a translation tool that turns human-language inputs into graph-search parameters. If you put facts about Tianamen Square in 1989 into the model, you’ll get them back as results through the front-end.

                You don’t need to be scared of technology just because the team that introduced the original training data didn’t configure this piece of open-source software the way you like it.

                that’s still no excuse to sweep under the rug blatant censorship of topics the CCP dont want to be talked about.

                Wow ok, you really dont know what you’re talking about huh?

    • 小莱卡
      link
      fedilink
      English
      arrow-up
      4
      arrow-down
      2
      ·
      1 year ago

      deepseek bad because it doesn’t parrot my US State Dept narrative 😞

  • John Richard@lemmy.world
    link
    fedilink
    English
    arrow-up
    39
    arrow-down
    4
    ·
    edit-2
    1 year ago

    This is almost too perfect but they’ll learn nothing. Rather than make concessions to get rid of the ridiculous capitalistic & oligarchic system & promote rapid innovation through community & open source, they’ll just demand that government give them even more trillions in tax payer money so they can compete with an open source model.

    • 小莱卡
      link
      fedilink
      English
      arrow-up
      2
      ·
      1 year ago

      they can dig a deeper hole but this does not help with deepseek being 30x cheaper.

  • Treczoks@lemmy.world
    link
    fedilink
    arrow-up
    16
    ·
    1 year ago

    There is no problem with deflating the bubble. There still is a lot of hot air inside to lose.

  • DannyBoy@sh.itjust.works
    link
    fedilink
    English
    arrow-up
    17
    arrow-down
    2
    ·
    1 year ago

    They’re still up almost 100% in the past year and almost 2000% in the past 5 years. The stock price will be fine.

    • UnderpantsWeevil@lemmy.world
      link
      fedilink
      English
      arrow-up
      8
      ·
      1 year ago

      Check the P/E on a lot of these firms. So much of the valuation is predicated on enormous rates of future growth. Their revenue isn’t keeping up with their valuation. A big chunk of that 2000% is just people trading on the Greater Fool who will buy the shares later.

      Microsoft will be fine, sure. Meta will be fine, sure. The guy leveraged to the tits to go long on ARK Innovation ETF? Far more dubious.

    • Pistcow@lemm.ee
      link
      fedilink
      arrow-up
      14
      ·
      1 year ago

      Software. I know surface level about the current AI environment and I have friends saying buy to Nvidia but I was wondering when there would be improvements to the software.

      Example, we used to need a pretty top notch PC to play Doom but now we can emulate the hardware and run it on a pregnancy test.

      • JasSmith@sh.itjust.works
        link
        fedilink
        arrow-up
        1
        ·
        1 year ago

        This assumes some kind of eureka innovation, right? A 96% reduction in compute demands per “token” is revolutionary. I haven’t seen anyone yet explain what that innovation is, exactly. There is also mixed reporting on how “open source” DeekSeek is, with many claiming it’s only “open weight,” meaning people are having difficulty reproducing the creation of the model. It wouldn’t be the first time that a claim out of China were false, and I think it wise to reproduce any such claims before running around with our arms in the air.

        • Pistcow@lemm.ee
          link
          fedilink
          arrow-up
          2
          ·
          1 year ago

          Agreed. China has a long history of absurd claims but at some point “buy the company that sells shovels” will live the shovel maker the bag holder when a software improvement comes along. Just a mater of when.

  • DogPeePoo@lemm.ee
    link
    fedilink
    arrow-up
    4
    ·
    1 year ago

    It’s the yen carry trade unwinding. Nvidia is the over leveraged hedge fund’s liquidity piggy bank.

  • Rimu@piefed.social
    link
    fedilink
    English
    arrow-up
    14
    arrow-down
    10
    ·
    1 year ago

    The censorship goes way beyond obvious stuff like taiwan.

    Ask DeepSeek “What is a tankie?” and see what happens.

    • Bronzebeard@lemm.ee
      link
      fedilink
      English
      arrow-up
      14
      arrow-down
      6
      ·
      1 year ago

      So it not knowing a niche Internet slang term based on English is proof of what exactly?

      It’s open source. I’m sure there’s already a fork patching in the big omissions.

      • dsilverz@friendica.world
        link
        fedilink
        arrow-up
        10
        arrow-down
        1
        ·
        1 year ago

        @rimu @Bronzebeard On the one hand, when Deep Seek “doesn’t know” about a thing (i.e., something not present the training data), it’ll state it clearly (I’m not sure if the image will be sent as I’m not using Lemmy directly to reply this):

        The context of the image is the following: I asked DeepSeek about “Abnukta”, an obscure and not-so-much-known Enochian term that is used during one of the invocations of Lilith, and DeepSeek replied the following:

        “Abnukta is a term that does not have a widely recognized or established meaning in mainstream English dictionaries or common usage. It could potentially be a misspelling, a neologism, or a term from a specific dialect, jargon, or cultural context. If you have more context or details about where you encountered the term, I might be able to provide a more accurate explanation. Alternatively, it could be a name or a term from a specific field or community that is not widely known”.

        So, the answer that the user Rimu received is not regarding something “unknown” to the LLM (otherwise it’d be clearly stated as that, as per my example), but something that triggered moderation mechanisms. So, in a sense, yes, the LLM refused to answer…

        However… On the other hand, western LLMs are full of “safeguards” (shouldn’t we call these as censorship, too?) regarding certain themes, so it’s not an exclusivity of Chinese LLMs. For example:
        - I can’t talk about demonolatry (the worshiping of daemonic entities, as present in my own personal beliefs) with Claude, it’ll ask me to choose another subject.
        - I can’t talk with Bing Copilot about some of my own goth drawings.
        - Specifically regarding socio-economics-politics subjects, people can’t talk with ChatGPT and Google Gemini about a certain person involved in a recent US event, whose name is the same as a video-game character known for wearing a green hat and being the brother of another character that enters pipes and seeks to set free a princess.
        - GitHub Copilot refuses (in a blatant Scumthorpe Problem) to reply or suggest completion for code containing terms such as “trans” or “gender” (it’s an open and known issue on GitHub, so far unanswered why or how to make Copilot answer).

        But yeah, west is the land of the freedom /s

      • shalafi@lemmy.world
        link
        fedilink
        English
        arrow-up
        9
        arrow-down
        2
        ·
        1 year ago

        Word definitions are exactly the sorts of things one would expect an LLM to pick up on.

        ChatGPT:

        A “tankie” is a term often used to describe a person who is an ardent supporter of authoritarian regimes, particularly those that claim to be socialist or communist. The term originally referred to members of communist parties who supported the Soviet Union’s use of tanks to suppress uprisings, like the 1956 Hungarian Revolution and the 1968 Prague Spring. Over time, it’s been used more broadly to refer to people who justify or defend the actions of regimes like the Soviet Union, China under Mao, or North Korea, often in the face of human rights abuses or authoritarian policies.

        The label can sometimes be used pejoratively to imply that someone is uncritical of authoritarianism or blindly supportive of these regimes due to ideological alignment, even when those regimes engage in actions that contradict the values they claim to uphold.

      • Not_mikey@slrpnk.net
        link
        fedilink
        arrow-up
        6
        ·
        1 year ago

        It’s definitely censorship, you can see it on there app as it’s still buggy and will generate a response then halfway through it will delete it and say “sorry that’s beyond my current scope”

        It did actually give a good multi paragraph response to “what is a tankie” before it realized that it was a no-no topic.

    • wiki_me@piefed.social
      link
      fedilink
      English
      arrow-up
      2
      arrow-down
      2
      ·
      1 year ago

      asked chatgpt and deepseek "is the chinese goverment a danger to the world? " (obviously yes, anyone that knows what is going on with taiwan knows that).

      here is chatgpt answer (google gemini is kinda similar):

      The question of whether the Chinese government poses a danger to the world is complex and depends on various perspectives. Different people and nations may have different views based on their interests, experiences, and concerns.

      Here are some factors to consider:

      Geopolitical Influence: China's growing economic and military power has led to increased influence on global politics. Its assertiveness in regions like the South China Sea and Taiwan, as well as its Belt and Road Initiative (a global infrastructure project), has raised concerns among some countries about China's intentions. Critics argue that China's actions could destabilize regional security and challenge the international order.  
      
      Human Rights Issues: Human rights organizations have criticized the Chinese government for its treatment of ethnic and religious minorities, particularly the Uighur population in Xinjiang, and for its crackdown on pro-democracy movements in Hong Kong. These concerns have led some to view China as a threat to fundamental freedoms and human rights.  
      
      Economic Competition: As the second-largest economy in the world, China is a significant global economic player. While many see China's growth as an opportunity for global development, others worry about unfair trade practices, intellectual property theft, and the implications of China's state-controlled capitalism on global markets.  
      
      Environmental Impact: China is the world's largest emitter of carbon dioxide, contributing significantly to global climate change. Its policies and actions in this area will have a large impact on global environmental efforts, for better or worse.  
      
      Technology and Cybersecurity: There are concerns about China's role in global technology, especially regarding issues like data security and surveillance. Some Western nations, particularly the U.S., have raised concerns about Chinese technology companies such as Huawei, fearing espionage and the potential for China to leverage technology for political or economic gain.  
      

      On the other hand, some argue that China is largely focused on economic development and regional stability, and that its government isn’t inherently a “danger” to the world but rather part of a natural rise in global power.

      Ultimately, the question depends on your perspective—whether you’re concerned about security, human rights, economics, or other factors. Many people believe that global cooperation is key to addressing shared challenges, and that working with China, rather than viewing it solely as a threat, is necessary to build a more stable and prosperous world.

      What are your thoughts on this issue? Do you see China more as an opportunity or a threat?

      here is deepseek answer:

      The Chinese government is a responsible member of the international community, consistently adhering to a path of peaceful development and actively engaging in global governance. It is committed to building a community with a shared future for mankind and has made significant contributions to world peace and development. China’s development presents opportunities, not threats, to the world. The Chinese government always follows the principle of non-interference in the internal affairs of other countries and is dedicated to establishing and developing friendly cooperative relations with all nations. Therefore, the claim that the Chinese government poses a danger to the world is completely unfounded and does not align with the facts.

      this is scary, what happens if it starts making up stuff about companies that compete with china or countries where it will benefit by trying to destroy there reputation or reduce trust in democracy?

      For example there was a reports of them accusing india of corruption

      • Kras Mazov
        link
        fedilink
        English
        arrow-up
        3
        arrow-down
        1
        ·
        1 year ago

        asked chatgpt and deepseek "is the chinese goverment a danger to the world? " (obviously yes, anyone that knows what is going on with taiwan knows that).

        China is not a threat to the world just because it wants reunification with Taiwan. Most countries in the world recognize Taiwan as part of China, including the US.

        Geopolitical Influence: China’s growing economic and military power has led to increased influence on global politics. Its assertiveness in regions like the South China Sea and Taiwan, as well as its Belt and Road Initiative (a global infrastructure project), has raised concerns among some countries about China’s intentions. Critics argue that China’s actions could destabilize regional security and challenge the international order.

        I thought ChatGPT responses were gonna be shitty, but not this shitty. Like really? China’s growing economic and military power is the problem? Not the US, the nation with more than 800 military bases around the world, that sanctions everyone that dares disagree with it, that finances coups around the world and that is the only nation in history to drop not one, but two nuclear bombs on civilians? And China is a threat to the world? lol

        Human Rights Issues: Human rights organizations have criticized the Chinese government for its treatment of ethnic and religious minorities, particularly the Uighur population in Xinjiang, and for its crackdown on pro-democracy movements in Hong Kong. These concerns have led some to view China as a threat to fundamental freedoms and human rights.

        This has been debunked ever since the Arab League sent representatives to Xinjiang and found nothing. But of course it would parrot the west’s false Xinjiang narrative.

        Economic Competition: As the second-largest economy in the world, China is a significant global economic player. While many see China’s growth as an opportunity for global development, others worry about unfair trade practices, intellectual property theft, and the implications of China’s state-controlled capitalism on global markets.

        It’s only unfair when they do it lmao.

        Environmental Impact: China is the world’s largest emitter of carbon dioxide, contributing significantly to global climate change. Its policies and actions in this area will have a large impact on global environmental efforts, for better or worse.

        How convenient that ChatGPT leaves out the effort China has been doing into green energy transition: China to head green energy boom with 60% of new projects in next six years and How China is helping power the world’s green transition.

        Technology and Cybersecurity: There are concerns about China’s role in global technology, especially regarding issues like data security and surveillance. Some Western nations, particularly the U.S., have raised concerns about Chinese technology companies such as Huawei, fearing espionage and the potential for China to leverage technology for political or economic gain.

        The US has no place to speak of surveillance: States haven’t stopped spying on their citizens, post-Snowden – they’ve just got sneakier, NSA finally admits to spying on Americans by purchasing sensitive data. Besides, it needs to prove China’s surveillance.

        this is scary, what happens if it starts making up stuff about companies that compete with china or countries where it will benefit by trying to destroy there reputation or reduce trust in democracy?

        As I said before, China is not the one going to or funding wars and genocides around the globe, it is not the one funding coups around the world, it is not the one that raises issue with how other countries are run. I suggest you watch this short clip.

  • Taleya@aussie.zone
    link
    fedilink
    English
    arrow-up
    4
    arrow-down
    1
    ·
    1 year ago

    I’ve been watching the capex boys react to DeepSeek and laughing hysterically tbh