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DeepSeek's R1 Model Shakes Tech Market, Developed for $6 Million Amid Nvidia Stock Decline

Jan 28, 2025, 08:45 AM

DeepSeek, a Chinese artificial intelligence startup, has emerged as a significant player in the AI industry, challenging established US tech giants like OpenAI, Google, and Meta. The company's latest AI model, R1, has demonstrated performance comparable to or better than leading US models, but at a fraction of the cost, reportedly developed with a budget of just $6 million using Nvidia H800 chips and only 2000 chips. This development has caused a notable impact on the global tech market, with stocks of major tech companies such as Nvidia experiencing significant declines. DeepSeek's approach to AI development, which includes using less advanced chips and innovative training methods, has raised concerns about the future of US dominance in AI technology. The startup's models, including the open-source DeepSeek-V3 and DeepSeek-R1, have been noted for their efficiency and affordability, prompting a reevaluation of the high costs traditionally associated with AI development in the US.