DeepSeek says it has produced a free open-source assistant that uses lower-cost chips and less data compared to its American rivals Markets across Europe and US stock market futures fell this morning as advances by the Chinese artificial intelligence start-up DeepSeek caused investors to doubt the necessity of the scale of American investment in AI.
DeepSeek says it has produced a free open-source assistant that uses lower-cost chips and less data compared to its American rivals. The latest developments by DeepSeek call into question claims made by US-based companies about the level of investment required in AI.
The tech-focused US Nasdaq composite futures slid 3.4 per cent and S&P 500 futures declined 2.4 per cent.
The Chinese AI start-up claims to have made advances in training models using fewer Nvidia chips than its competitors in the United States. The company’s chatbot, which rivals Chat GPT, rose to the top of Apple’s app store downloads in the US over the weekend.
• What is DeepSeek and how is it different to other AI models?
Shares in chip maker Nvidia declined 10.3 per cent in pre-market trading while Microsoft, Meta and Google’s parent company Alphabet declined 3.9 per cent, 5.2 per cent and 3.8 per cent respectively in pre-market trading.
Funds focused technology also suffered on the FTSE 250, with Allianz Technology Trust, Polar Capital Technology Trust, Baillie Gifford US Growth Trust and JP Morgan American Investment all suffering falls of more than 4 per cent. Scottish Mortgage Investment Trust, whose growth-focused portfolio includes stakes in Amazon, chipmakers Nvidia and TSMC, Temu owner PDD Holdings and Spotify, lost 5.5 per cent on the FTSE 100.
Investors have become increasingly interested in DeepSeek after the Chinese start-up released its latest large-language AI model, which revealed similar performance to American rivals produced by Open AI and Meta. The roll-out of DeepSeek’s new chatbot challenges a bet by investors that AI is set to fuel demand in for both chipmakers and data centres.
In a technical report, DeepSeek said it used a cluster of more than 2,000 Nvidia chips to train its V3 model. By contrast, tens of thousands of chips […]
Chinese AI startup DeepSeek hits markets and puts ChatGPT on notice
