Emergence of DeepSeek raises doubts about sustainability of western artificial intelligence boom
The race for domination in artificial intelligence was blown wide open on Monday after the launch of a Chinese chatbot wiped $1tn from the leading US tech index, with one investor calling it a “Sputnik moment” for the world’s AI superpowers., a competitor to OpenAI and its ChatGPT tool, shook faith in the US artificial intelligence boom by appearing to deliver the same performance with fewer resources.
Marc Andreessen, a leading US venture capitalist, compared the launch of DeepSeek’s R1 model last Monday to a pivotal moment in the US-USSR space race, posting on X that it was AI’s “Sputnik moment” – referring to when the Soviet Union astounded its cold war rival by launching a satellite into orbit.The company was founded by the entrepreneur Liang Wenfeng, who runs a hedge fund, High-Flyer Capital, that uses AI to identify patterns in stock prices.
The DeepSeek development raises doubts over the necessity for hefty investment in AI infrastructure such as chips and the market-leading role of US tech companies in AI, which in turn threatens to put American tech sector valuations under pressure.Get set for the working day – we'll point you to all the business news and analysis you need every morningDeepSeek claims R1 cost $5.
Richard Hunter, the head of markets at the platform Interactive Investor, said: “It will almost certainly put the cat among the pigeons as investors scramble to assess the potential damage it could have on a burgeoning industry, which has powered much of the gain seen in the main indices over the last couple of years.
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