China’s tech industry recently gave the U.S. tech industry and the stock market a rude shock.
Has DeepSeek redefined the role of AI? @mgualtieri talks to @guardian about how DeepSeek will push US tech giants to experiment and accelerate their #AI development https://t.co/CYzBt6JZJs
— Forrester (@forrester) February 4, 2025
It unveiled DeepSeek, an artificial intelligence model that performs on par with America’s best, despite trade restrictions on A.I. chips. Shares of key players in the artificial intelligence sector, such as Nvidia, Alphabet, Meta, and OpenAI, were among the most affected.
Investors are increasingly concerned that these companies may not live up to the lofty expectations their current valuations suggest. On Monday, the S&P 500 index fell 1.5 percent, while the tech-heavy Nasdaq dropped 3.1 percent. Nvidia was hit particularly hard, plunging 16.9 percent and losing roughly $600 billion in market value.
Expert @_KarenHao on what Deepseek may mean for the future of journalism and Gen AI.
"DeepSeek will be very inspirational for AI researchers who now realise they can develop approaches that require significantly less money."
✍️ A piece by @Marina__Adamihttps://t.co/yoUP9oYKZz
— Reuters Institute (@risj_oxford) February 3, 2025
The excitement over A.I. prospects had bolstered technology stocks over the past year, but rising concerns are now evident. New competition in artificial intelligence has sent the shares of companies deeply invested in A.I. tumbling.
? Which is the best AI assistant?
The Turing’s Robert Blackwell helped @guardian try out some leading chatbots, asking #AI tools the same questions to understand their differences.
Read the full article: https://t.co/it1txXdpXE
— The Alan Turing Institute (@turinginst) February 3, 2025
The pain was concentrated among companies at the forefront of the A.I. boom, including multitrillion-dollar behemoths that have driven U.S. markets since the 1990s.
In addition to Nvidia, Alphabet and Microsoft experienced declines.
DeepSeek disrupts U.S. tech industry
Australia’s science minister, Ed Husic, has become the first member of a Western government to raise privacy concerns about DeepSeek.
Chinese technology, ranging from Huawei to TikTok, has repeatedly been the subject of allegations about links to the Chinese state, sparking fears regarding potential data harvesting for intelligence purposes. Husic expressed his apprehensions during an interview with ABC News on Tuesday, emphasizing the need to carefully evaluate data and privacy management issues related to DeepSeek. “I would be very careful about that; these types of issues need to be weighed up carefully,” he added.
Despite the concerns, users in the UK and US have shown significant interest in the app. DeepSeek has rapidly climbed to the top of the app stores in both countries, with market analysts Sensor Tower reporting 3 million downloads since its launch, 80% of which have occurred in the past week. DeepSeek’s data collection practices have faced particular scrutiny.
The app collects large amounts of personal information from users, stored on secure servers in China. This data includes email addresses, phone numbers, dates of birth, user inputs like text and audio, and technical information such as phone models, operating systems, IP addresses, and keystroke patterns. While the app collects significant data, experts point out that its privacy policies are similar to those of rival services like ChatGPT and social media platforms.
Emily Taylor, chief executive of Oxford Information Labs, warned that anyone working on confidential or national security issues should be aware of the risks involved with openly available AI models.
