Close Menu
News JournosNews Journos
  • World
  • U.S. News
  • Business
  • Politics
  • Europe News
  • Finance
  • Turkey Reports
  • Money Watch
  • Health
Editors Picks

Donald Trump, Elon Musk address the left’s constitutional crisis allegations during ‘Hannity’ exclusive

February 19, 2025

Tesla Cybertruck Vandalized with Hate Symbols in NYC

March 28, 2025

Schiff Blocks Martin’s Nomination as D.C. U.S. Attorney

April 1, 2025

Fired FTC Commissioner Warns Trump Administration’s Actions Threaten Market Stability

March 19, 2025

Trump Administration Claims State Secrets Privilege in Kilmar Abrego Garcia Case

May 8, 2025
Facebook X (Twitter) Instagram
Latest Headlines:
  • Reward Offered for Suspects in Dismemberment Case of Italian Scientist Found in Colombia
  • Airlines Cancel and Divert Middle East Flights Amid Iran-US Tensions
  • Explosion Sounds in Qatar’s Capital Amidst Iranian Attack on US Bases
  • Satellite Images Show US Military Damage to Iran’s Nuclear Facilities
  • Supreme Court Considers Rastafarian Inmate’s Lawsuit Over Dreadlocks Cut by Prison Officials
  • Dutch Police Disperse Climate Protest Near The Hague Before NATO Summit
  • Veteran-Led Project DYNAMO Aids American Evacuations from Israel Amid Rising Tensions
  • Iran Launches Missile Attack on U.S. Base in Qatar
  • Iran Launches Missile Attack on U.S. Military Base in Qatar
  • Midday Stock Highlights: Notable Moves in TSLA, NVO, HIMS, NTRS
  • Exiled Prince Proposes Leadership for Democratic Transition in Iran as Regime Weakens
  • Medical Debt vs. Credit Card Debt: Prioritizing Payments Explained
  • Shipping Companies Route Around Strait of Hormuz Amid Rising Tensions
  • May Home Sales Rise Marginally, Prices Reach Record High
  • Compass Files Antitrust Lawsuit Against Zillow Over “Zillow Ban”
  • U.S. Embassy in Qatar Urges Americans to Shelter Amid Iran-Israel Conflict
  • Russia Warns of Potential Nuclear Catastrophe from Trump’s Iran Strikes
  • Fed Governor Supports July Rate Cut Contingent on Low Inflation
  • Rubio Discusses Foreign Policy on National Broadcast
  • European States Ranked on Tobacco, Junk Food, and Alcohol Regulations
Facebook X (Twitter) Instagram
News JournosNews Journos
Subscribe
Monday, June 23
  • World
  • U.S. News
  • Business
  • Politics
  • Europe News
  • Finance
  • Turkey Reports
  • Money Watch
  • Health
News JournosNews Journos
You are here: News Journos » Tech » What is DeepSeek, and why is it causing Nvidia and other stocks to slump?
What is DeepSeek, and why is it causing Nvidia and other stocks to slump?

What is DeepSeek, and why is it causing Nvidia and other stocks to slump?

News EditorBy News EditorFebruary 19, 2025 Tech 6 Mins Read

The emergence of a new Chinese artificial intelligence company called DeepSeek has stirred significant interest and concern in the U.S. tech sector. This development is particularly noteworthy as experts suggest that DeepSeek’s technology may rival that of established players like OpenAI. With remarkable low development costs and a growing user base, DeepSeek’s debut has sparked a notable sell-off in AI-related stocks, raising questions about the future of AI investments from American companies.

Article Subheadings
1) Understanding DeepSeek
2) Availability of DeepSeek’s Technology
3) Distinguishing Features of DeepSeek
4) Privacy Concerns Surrounding DeepSeek
5) Implications for Nvidia and the Tech Market

Understanding DeepSeek

DeepSeek emerged in July 2023, founded by Liang Wenfeng, an alumnus of the prestigious Zhejiang University and a hedge fund manager with significant assets. The company was developed with an initial financial outlay of only $6 million—stunningly low compared to the anticipated $1 trillion investment by U.S. companies in AI-related technologies over the next few years. This raises questions about the efficacy of traditional business models and the potential market disruption that low-cost technologies can create.

Previously, Ives had noted that Liang had amassed a considerable “stockpile of Nvidia A100 chips,” the usage of which has now been restricted due to export regulations. This unique positioning allows DeepSeek to leverage high-end technology that is no longer available to most players in the industry. The development ethos of DeepSeek aims to make advanced AI accessible and competitive with established entities such as OpenAI and Google, thereby captivating both users and investors.

Availability of DeepSeek’s Technology

DeepSeek’s AI application quickly ascended to the top of Apple’s App Store, indicating a swift and unexpected market reception. As of Monday morning, the app became available for free, capturing the attention of users eager to explore a potentially revolutionary tool. However, the app faced challenges, including a temporary suspension of new user registrations due to “large-scale malicious attacks,” which the company attributed to vulnerabilities in the rollout.

In a bid to manage the influx of users, DeepSeek’s communication indicated that existing customers could continue accessing the service seamlessly. Despite these obstacles, the rapid uptake demonstrates a substantial interest in a product that analysts have compared favorably to other established technologies, reinforcing the notion of fast-paced innovation in the AI space.

Distinguishing Features of DeepSeek

DeepSeek distinguishes itself with its open-source large language model, which employs a strategy termed “inference-time computing.” This approach essentially conserves significant computational resources by activating only the necessary parts of its model for user queries, resulting in substantial cost and energy efficiencies. Industry voices, including notable investors, have highlighted the application as a critical innovation in AI, representing a pivotal moment in the industry landscape.

However, skepticism also surrounds DeepSeek’s potential to establish itself firmly in the U.S. market. Analysts, including Ives, express doubts about major companies adopting a solution from a Chinese startup for critical AI infrastructure. While recognizing the technological advancements, there is a prevailing sentiment that traditional players like Nvidia continue to hold a decisive advantage in the broader context of AI development and deployment.

Privacy Concerns Surrounding DeepSeek

The rapid rise of DeepSeek has also triggered concerns regarding user privacy. The company’s data collection practices—storing sensitive information such as keystrokes, audio inputs, and personal identifiers on servers located in China—mirror controversies associated with companies like TikTok, which has faced scrutiny in the U.S. over its data handling. Critics of DeepSeek warn that its operations pose similar risks to national security, igniting broader discussions about data sovereignty and consumer protections in a globalized digital economy.

The compounded concerns around personal data practices and geopolitical implications warrant careful consideration, especially as regulatory frameworks grappling with tech ownership and user privacy continue to evolve. Given the current climate, these challenges could hinder DeepSeek’s acceptance within critical markets, potentially impacting its growth trajectory despite strong technological underpinnings.

Implications for Nvidia and the Tech Market

The ramifications of DeepSeek’s emergence are notably felt across Wall Street, with established tech companies such as Nvidia witnessing profound stock market repercussions. Following DeepSeek’s launch, Nvidia stock plummeted significantly, shedding 17% of its value, which translates to a staggering $600 billion loss—the most considerable one-day decline in stock market history. Such shifts prompt market analysts to reevaluate existing valuations of tech stocks buoyed by AI promises.

The broader implications extend to the question of whether investors might be disproportionately investing in companies with inflated valuations. Analysts are challenged to reassess viability amid increasing competition and novel entrants like DeepSeek that can deliver comparable technological outcomes at a fraction of the traditional costs. The emerging narrative suggests a need for investors to exercise caution in correlating AI potential with organizational strength or market leadership.

No. Key Points
1 DeepSeek’s funding and founding details highlight significant market disruption potential.
2 The app has quickly gained popularity, raising concerns about stability and security.
3 DeepSeek’s innovative technology offers compelling cost and energy efficiencies.
4 The company faces significant scrutiny regarding user privacy and data collection practices.
5 Market reactions signal broader concerns over potential saturation and overvaluation in AI stocks.

Summary

The emergence of DeepSeek marks a critical moment in the competitive landscape of artificial intelligence, with implications for both users and the broader tech market. As Wall Street grapples with the fallout from a disruptive, lower-cost alternative to established AI technologies, concerns over privacy and security underscore a need for diligent evaluation of emerging players in the sector. The interplay between innovation, market dynamics, and regulatory oversight remains to be seen as the technology community reflects on DeepSeek’s implications for the future.

Frequently Asked Questions

Question: What is DeepSeek?

DeepSeek is a private Chinese artificial intelligence company focused on developing an AI application that competes with technologies from established players like OpenAI.

Question: How does DeepSeek’s technology work?

DeepSeek utilizes an open-source large language model and inference-time computing to optimize resource usage, activating only necessary sections of its model based on user queries.

Question: What privacy concerns are associated with DeepSeek?

Experts are raising alarms over DeepSeek’s data collection practices, including storing sensitive user information on servers in China, potentially exposing users to privacy risks similar to those associated with TikTok.

Artificial Intelligence Blockchain causing Cloud Computing Consumer Electronics Cybersecurity Data Science DeepSeek E-Commerce Fintech Gadgets Innovation Internet of Things Mobile Devices Nvidia Programming Robotics slump Software Updates Startups Stocks Tech Reviews Tech Trends Technology Virtual Reality
Share. Facebook Twitter Pinterest LinkedIn Email Reddit WhatsApp Copy Link Bluesky
News Editor
  • Website

As the News Editor at News Journos, I am dedicated to curating and delivering the latest and most impactful stories across business, finance, politics, technology, and global affairs. With a commitment to journalistic integrity, we provide breaking news, in-depth analysis, and expert insights to keep our readers informed in an ever-changing world. News Journos is your go-to independent news source, ensuring fast, accurate, and reliable reporting on the topics that matter most.

Keep Reading

Tech

Unsolicited Password Resets Signal Potential Hacking Attempts

8 Mins Read
Tech

Historic Landing of First Passenger-Carrying Electric Airplane at JFK

6 Mins Read
Tech

Ransomware Attack on Tax Relief Service Exposes Customer Data

6 Mins Read
Tech

Amazon Reduces Workforce Amid Generative AI Integration

8 Mins Read
Tech

Brain Implant Successfully Tested in 20-Minute Human Surgery

6 Mins Read
Tech

AI Boom Strains Power Grid as Data Centers Triple Energy Demand

7 Mins Read
Mr Serdar Avatar

Serdar Imren

News Director

Facebook Twitter Instagram
Journalism Under Siege
Editors Picks

States File Lawsuit Against Trump Administration Over HHS Job Cuts

May 5, 2025

Pakistan Urges U.S. Intervention Amid Nuclear Tensions

May 2, 2025

UAE Leader Honors Trump with Order of Zayed During Visit

May 16, 2025

Trump Sends Message to Stranded Astronauts, Jokes About Joining Rescue Mission

March 6, 2025

Trump Criticizes Harvard’s Foreign Students for Lack of Financial Contributions

May 25, 2025

Subscribe to News

Get the latest sports news from NewsSite about world, sports and politics.

Facebook X (Twitter) Pinterest Vimeo WhatsApp TikTok Instagram

News

  • World
  • U.S. News
  • Business
  • Politics
  • Europe News
  • Finance
  • Money Watch

Journos

  • Top Stories
  • Turkey Reports
  • Health
  • Tech
  • Sports
  • Entertainment

COMPANY

  • About Us
  • Get In Touch
  • Our Authors
  • Privacy Policy
  • Terms and Conditions
  • Accessibility

Subscribe to Updates

Get the latest creative news from FooBar about art, design and business.

© 2025 The News Journos. Designed by The News Journos.

Type above and press Enter to search. Press Esc to cancel.

Ad Blocker Enabled!
Ad Blocker Enabled!
Our website is made possible by displaying online advertisements to our visitors. Please support us by disabling your Ad Blocker.