DeepSeek releases ChatGPT-like AI model, U.S. tech stocks tumble

China-based startup released R1 AI model in late January 2025

Alenoach, Public domain, via Wikimedia Commons

DeepSeek released its R1 artificial intelligence (AI) model, and the U.S. stock market saw a decline in tech and AI stocks.

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DeepSeek, a China-based artificial intelligence (AI) start-up, recently released its R1 AI model.

Its features are similar to other AI platforms, such as ChatGPT, and the company, according to a CNN report, spent markedly less than other AI organizations for computing power on its base model.

U.S. tech stocks tumble during early trading

As the U.S. stock market opened on Monday, the tech sector responded with a dip. CNN reported that the S&P 500 fell by 1.4%, while NASDAQ dropped by 2.3%.

Tech and artificial intelligence companies such as NVIDIA, Meta and Alphabet also suffered a stock price decline.

U.S. and China competing in AI landscape

DeepSeek’s R1, according to the company, only required $5.6 million in computing power for its base model. Comparatively, OpenAI, Google and Meta have spent hundreds of millions or billions on the development and operation of their respective AI technologies.

The DeepSeek news comes on the heels of an up-to $500 billion investment in AI infrastructure from the private sector - led by OpenAI, Oracle and SoftBank – announced by U.S. President Donald Trump on January 21.

On Twitter/X, users saw the release of DeepSeek as both innovative and impressive.

NEWS: DeepSeek just dropped ANOTHER open-source AI model, Janus-Pro-7B.

It's multimodal (can generate images) and beats OpenAI's DALL-E 3 and Stable Diffusion across GenEval and DPG-Bench benchmarks.

This comes on top of all the R1 hype. The �� is cookin' pic.twitter.com/yCmDQoke0f
— Rowan Cheung (@rowancheung) January 27, 2025

Deepseek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen — and as open source, a profound gift to the world. ��
— Marc Andreessen �� (@pmarca) January 24, 2025

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DeepSeek releases ChatGPT-like AI model, U.S. tech stocks tumble