Chinese AI DeepSeek Deep-Sixes OpenAI on the App Store, Stocks Tank

Chinese AI chatbot DeepSeek has displaced OpenAI’s ChatGPT as the most downloaded app on the Apple App store and the market is panicking. Stocks for major AI connected companies like NVIDIA fell on Monday morning following the news.

DeepSeek released its R1 chatbot at the end of December and it’s only taken the app about a month to claim its spot at the top of the App store. Upon the news that it reached the top, share prices for GPU maker NVIDIA fell 11%, Oracle dropped 8%, and Palantir was down 5% (Cramer effect). Stocks are adjusting to the revelation that China can build AI faster, cheaper, and just as good as America.

The reason the market is flipping out is because DeepSeek-R1 took two months to build, cost $6 million, and was trained using cheaper and lower-powered NVIDIA H800 GPUs. It’s also open source so anyone can go to a GitHub right now, pull it apart, and tinker with it.

When it comes to training AI models, Silicon Valley has always said that bigger and more expensive is better. OpenAI CEO Sam Altman seems to believe he’s building some kind of literal god on earth called AGI and that the construction of this beast would require massive resources. OpenAI’s business models require sacrificing the present to construct a terrifying future in its own image.

OpenAI said it needed to steal the creative output of everyone on the planet to refine its models and that it couldn’t pay them for it. It would need to build vast data centers to process information powered by new nuclear power plants. Meta, Anthropic, and other companies are investing billions to build infrastructure to power AI with the hope of massive returns and a future made easier and simpler for tech billionaires.

Softbank and OpenAI teamed up with President Trump to announce Stargate, a $500 billion AI initiative. The U.S. passed the CHIPs Act to make sure China didn’t get the most advanced GPUs and wasn’t able to build AI as fast as America. Silicon Valley’s AI lords were set to spend billions to rebuild pieces of the country and, they hoped, change the way America worked.

Six million dollars. Two months. NVIDIA H800 SXM5s. That’s all it took to call into question this dream of the future.

“To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient,” Satya Nadella, Microsoft CEO and OpenAI business partner said at Davos last week. “We should take the developments out of China very, very seriously.”

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