Stocks Get Crushed, Crypto Traders Liquidated for $983,889,444 As ChatGPT Rival DeepSeek Spooks Markets
A new Chinese advancement in artificial intelligence, DeepSeek, has left US markets feeling unsettled, triggering corrections in equities and crypto assets.
DeepSeek, a startup based in Hangzhou, China, released its open-source large language model (LLM) app for free on Monday morning after reportedly spending only $5.58 million to develop and train it – a small fraction of the cost of ChatGPT, which hasn’t been publicly acknowledged by OpenAI but was estimated to be at least over $100 million.
OpenAI is valued at $157 billion and recently pledged to raise $500 billion for AI infrastructure in the United States, but some say such numbers may be called into question given DeepSeek’s apparent cost-efficiency.
Fiona Cincotta, senior market analyst at City Index, told BBC,
“This idea of a low-cost Chinese version hasn’t necessarily been forefront, so it’s taken the market a little bit by surprise…
So, if you suddenly get this low-cost AI model, then that’s going to raise concerns over the profits of rivals, particularly given the amount that they’ve already invested in more expensive AI infrastructure.”
US tech billionaire and general partner of Andreessen Horowitz, said that the release of DeepSeek R1 was China’s “Sputnik Moment,” referring to the Soviet Union beating the Americans to space with the first artificial Earth satellite.
At time of writing, AI chipmaker Nvidia (NVDA) – a member of the “Magnificent 7” – plummeted on Monday and is now down 22% from its January high after losing over $400 billion from its market cap. The S&P 500 and Nasdaq indices are also down 1.75% and 3.19% respectively on the day.
Bitcoin and digital assets followed a similar path.
According to crypto data aggregator Coinglass, there have been over $975 million in liquidations in just 24 hours, mostly traders attempting to long Bitcoin (BTC), Ethereum (ETH) and altcoins with leverage.
BTC is trading at $99,789 at time of writing, and virtually all other digital assets are in the red on the day.
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The post Stocks Get Crushed, Crypto Traders Liquidated for $983,889,444 As ChatGPT Rival DeepSeek Spooks Markets appeared first on The Daily Hodl.