- A new Chinese AI app called DeepSeek has become incredibly popular and surpassed rivals and already-established AI apps like ChatGPT to become the number one free app on Apple’s App Store and then rattled the US tech and crypto markets.
- DeepSeek is an artificial intelligence chatbot app like OpenAI’s ChatGPT, and Google’s Gemini
- DeepSeek was founded in 2023 in Hangzhou, China and released its first AI large language model in late 2024
- According to DeepSeek, its latest models were built using Nvidia's less powerful H800 chips, which are legal in China
On Monday, January 27, 2025, the shares of Nvidia plunged 17%, wiping out $589 billion from its market capitalisation and knocking it from its prime position as the world’s most valuable company. This slump also meant that Nvidia’s valuation fell from $3.5 trillion to $2.9 trillion, just below Apple’s and Microsoft’s. The bleeding also affected other tech companies in the United States of America.
On the same day, the global crypto market also bled, with Bitcoin crashing to below $100,000 for the first time since President Donald Trump of the United States assumed office, trading as low as $97,906. Filecoin also lost 10% of its market cap (dipping to $2.84 billion) and Fartcoin crashed by 25.31%, trading as low as $0.9613, with a market of $960.32 million, down 25.43%.
Why did all that happen just within hours? Here’s why: a new Chinese AI app called DeepSeek has become incredibly popular and surpassed rivals and already-established AI apps like ChatGPT to become the number one free app on Apple’s App Store and then rattled the US tech and crypto markets.
What is the Chinese AI app DeepSeek?
DeepSeek is an artificial intelligence chatbot app like OpenAI’s ChatGPT, and Google’s Gemini. DeepSeek answers queries and questions like any other AI chatbot, though it does not answer some politically sensitive questions.
Developers of DeepSeek said the chatbot is at the same performance level as ChatGPT and can compete with any AI chatbot in the world. In less than a month since it became available on app stores, DeepSeek has climbed to the top of app store download charts in the US, UK and other European countries.
DeepSeek was founded in 2023 in Hangzhou, China and released its first AI large language model in late 2024. DeepSeek's CEO is Liang Wenfeng. Liang co-founded High-Flyer, one of China’s top hedge funds, which has its focus on AI-driven quantitative trading.
According to a post on the Chinese social media platform WeChat, the fund had accumulated a cluster of 10,000 of California-based Nvidia's high-performance A100 graphics processor chips by 2022, which are used to create and operate AI systems. Soon after, the United States banned those chips from being sold to China.
Why DeepSeek freaked people out and crashed Nvidia's stock
According to DeepSeek, its latest models were built using Nvidia's less powerful H800 chips, which are legal in China. This suggests that advanced AI research may not require the most expensive hardware.
After releasing a new AI model last month that it claimed was comparable to models from American companies like ChatGPT maker OpenAI and was more economical in its use of pricey Nvidia chips to train the system on massive amounts of data, DeepSeek started to garner more attention in the AI industry. Early this year, the chatbot made its way into the Google and Apple app stores, expanding its reach.
However, the panic that ensued was triggered by a follow-up research paper that was released last week, the same day that President Donald Trump took office, according to AP. That paper discussed another DeepSeek AI model, R1, which was substantially less expensive than an OpenAI model of the same name, o1, and demonstrated sophisticated "reasoning" abilities, such as the capacity to reconsider how it approached a mathematical problem.
Stacy Rasgon is a Bernstein analyst who follows the semiconductor industry. He said, via AP, that DeepSeek is “not using any innovations that are unknown or secret or anything like that. These are things that everybody’s experimenting with.”
On how DeepSeek was able to use low-performing and relatively cheap chips to build their AI model and their low price, Rasgon said, “What their economics look like, I have no idea,” and added, “But I think the price points freaked people out.”
How Ledger co-founder David Balland was kidnapped for BTC ransom, released
Meanwhile, TheRadar earlier reported that on January 22, 2025, rumours spread that David Balland, the co-founder of Ledger, a cryptocurrency hardware wallet manufacturer, had been kidnapped for Bitcoin ransom. The rumours caused panic about his safety and those close to him.
The rumour also sparked a flurry of reactions. Journalist Grégory Raymond later wrote around mid-morning New York time that Ledger co-founder Éric Larchevêque said, “Eric is safe. It’s the only thing I can communicate at the moment. I’m in the process of checking the information.”
