Chinese AI startup DeepSeek has wreaked havoc in the tech world in record time. With its latest model, the company is challenging US giants such as OpenAI and Nvidia -- and that at a fraction of the cost. Financial markets are also reacting.
DeepSeek's AI model, DeepSeek-R1, has been available as open source since before Christmas, but recently came out with a startling update, including documentation on its high efficiency and low cost.
DeepSeek's AI model is referred to as a “gamechanger” for the AI industry and their mobile app is already the most downloaded app on the App Store. The effect has been immediate: Nasdaq 100 futures have fallen by over 300 points in the morning hours Monday.
At the same time, the news is received with enthusiasm by the crypto communities, which are looking beyond DeepSeek alone and more emphasizing that it builds on open source and lowers the costs associated with AI models. Within crypto, one sees AI Open Code, along with crypto, as the very key to building a decentralized intranet staffed by smart and personal AI agents.
DeepSeek has done what many thought was impossible: developing an AI model that matches the performance of OpenAI, but at dramatically lower cost. The model was trained in just 60 days for around $6 million using older Nvidia H800 GPUs -- a budget 50 times lower than its competitors. By comparison, OpenAI has spent billions on similar technology.
DeepSeek-R1 excels particularly in the areas of complex reasoning, coding and mathematics. The model is also available in scaled-down versions that can be run locally, making advanced AI more accessible to developers with limited resources. This has led experts to refer to DeepSeek as a catalyst to accelerate the development of AI globally.
The launch of DeepSeek-R1 has sent shockwaves through financial markets. Nasdaq 100 futures fell by over 300 points before the stock market open, and Nvidia stock plunged by more than 5% in the aftermarket -- a loss equivalent to about $190 billion in market capitalization. Analysts point out that DeepSeek's cost-effectiveness could squeeze the margins of established players in the AI industry.
The market's reaction reflects fears that DeepSeek's open-source model could undermine the high cost and closed systems on which US technology giants have based their business models. At the same time, consumers, who now get access to advanced technology, are cheering at a fraction of the price.
One of the most notable aspects of DeepSeek is their open source strategy. By making the model's source code available to everyone, the company gives developers globally the ability to build on the technology
This strategy has also garnered attention from competitors such as Meta, who see open source as a key to the future of AI development. “This is a Sputnik moment for AI,” stated Marc Andreessen, a well-known technology investor, pointing to how DeepSeek can completely change the rules of the game.
Renowned Bitcoin enthusiast Erik Voorhees says that his Open Source AI language model Venice is already in the process of facilitating the integration of DeepDesk into Venice, without fear of Chinese data tapping. On X he writes: “If you want to use DeepSeek but don't want all your convos going to the CCP, use Venice. Alles convos is private, stored only in your local browser.”
The launch of DeepSeek-R1 has, as mentioned, initially created great excitement in the crypto community, which sees enormous opportunities in the combination of open-source AI and blockchain technology. “This is a massive win for crypto and open source,” states an analyst from Lilypad Network. Many point to how DeepSeek's open model, matching the performance of the best closed systems, can accelerate the development of decentralized applications. The combination of transparency and low cost empowers developers to build solutions that promote transparency and decentralization -- core values in the crypto environment.
DeepSeek's open nature provides the crypto community with unique opportunities to integrate advanced AI directly into decentralized systems. The model allows the development of autonomous agents that can learn, improve themselves and perform complex tasks without human intervention.
These agents can be used for everything from automated financial services in DeFi platforms to smart contracts that continuously optimize themselves.
“Open source AI combined with blockchain represents the perfect partnership,” stated an analyst from Lilypad Network. The technology also allows for rapid innovation in Web3 applications, where blockchain and AI together can transform both the financial sector and digital services.
“An open model with this performance lays the foundation for the agentic economy of the future,” stated an analyst from Virtuals Protocol. The technology also allows for rapid innovation in Web3 applications, where blockchain and AI together can transform both the financial sector and digital services.
“Open source models like DeepSeek are exactly what we need for true decentralization,” says an expert from Binance Square. Many see this as a turning point where innovation is no longer held back by closed systems or high costs.
Several leading protocols for agentic AI also tell X that even before the latest DeepDesk hype, they have adopted DeepSeek as one of the AI language models they have integrated. This applies to Eliza and Wayfinder, among others.
The launch of DeepSeek marks a turning point in the global AI race. American companies now face a Chinese competitor that delivers state-of-the-art technology with minimal resources. This raises questions about whether the United States can maintain its dominance in artificial intelligence.
Despite U.S. export controls on high-end chipper, DeepSeek has found innovative ways to leverage older hardware, showing that necessity can drive forward cutting-edge innovation. “We thought this technology would cost hundreds of billions of dollars to develop,” says a Binance Square analyst, “but DeepSeek shows that efficiency and transparency can be just as important as raw computing power.”
DeepSeek's success marks the start of a new era in artificial intelligence. Where U.S. companies have long dominated the field with closed systems and astronomical budgets, DeepSeek shows that there are alternatives that are both cheaper, more efficient and more accessible.
Consumers are once again the big winners in this development, but for the established players this is a warning sign. If DeepSeek can deliver state-of-the-art technology with minimal resources, the entire industry needs to rethink its strategies -- fast.
The question now is not only how American companies will respond to the challenge from DeepSeek, but also how this will affect the balance of innovation, geopolitics and economics in the years ahead.
This article has been researched and prepared in several ways: using the author's knowledge, overview and narrative ability, via good old-fashioned search, using an analytic-based human-to-agent dialogue and through a personal quality assurance of content and sources.
Chinese AI startup DeepSeek has wreaked havoc in the tech world in record time. With its latest model, the company is challenging US giants such as OpenAI and Nvidia -- and that at a fraction of the cost. Financial markets are also reacting.
DeepSeek's AI model, DeepSeek-R1, has been available as open source since before Christmas, but recently came out with a startling update, including documentation on its high efficiency and low cost.
DeepSeek's AI model is referred to as a “gamechanger” for the AI industry and their mobile app is already the most downloaded app on the App Store. The effect has been immediate: Nasdaq 100 futures have fallen by over 300 points in the morning hours Monday.
At the same time, the news is received with enthusiasm by the crypto communities, which are looking beyond DeepSeek alone and more emphasizing that it builds on open source and lowers the costs associated with AI models. Within crypto, one sees AI Open Code, along with crypto, as the very key to building a decentralized intranet staffed by smart and personal AI agents.
DeepSeek has done what many thought was impossible: developing an AI model that matches the performance of OpenAI, but at dramatically lower cost. The model was trained in just 60 days for around $6 million using older Nvidia H800 GPUs -- a budget 50 times lower than its competitors. By comparison, OpenAI has spent billions on similar technology.
DeepSeek-R1 excels particularly in the areas of complex reasoning, coding and mathematics. The model is also available in scaled-down versions that can be run locally, making advanced AI more accessible to developers with limited resources. This has led experts to refer to DeepSeek as a catalyst to accelerate the development of AI globally.
The launch of DeepSeek-R1 has sent shockwaves through financial markets. Nasdaq 100 futures fell by over 300 points before the stock market open, and Nvidia stock plunged by more than 5% in the aftermarket -- a loss equivalent to about $190 billion in market capitalization. Analysts point out that DeepSeek's cost-effectiveness could squeeze the margins of established players in the AI industry.
The market's reaction reflects fears that DeepSeek's open-source model could undermine the high cost and closed systems on which US technology giants have based their business models. At the same time, consumers, who now get access to advanced technology, are cheering at a fraction of the price.
One of the most notable aspects of DeepSeek is their open source strategy. By making the model's source code available to everyone, the company gives developers globally the ability to build on the technology
This strategy has also garnered attention from competitors such as Meta, who see open source as a key to the future of AI development. “This is a Sputnik moment for AI,” stated Marc Andreessen, a well-known technology investor, pointing to how DeepSeek can completely change the rules of the game.
Renowned Bitcoin enthusiast Erik Voorhees says that his Open Source AI language model Venice is already in the process of facilitating the integration of DeepDesk into Venice, without fear of Chinese data tapping. On X he writes: “If you want to use DeepSeek but don't want all your convos going to the CCP, use Venice. Alles convos is private, stored only in your local browser.”
The launch of DeepSeek-R1 has, as mentioned, initially created great excitement in the crypto community, which sees enormous opportunities in the combination of open-source AI and blockchain technology. “This is a massive win for crypto and open source,” states an analyst from Lilypad Network. Many point to how DeepSeek's open model, matching the performance of the best closed systems, can accelerate the development of decentralized applications. The combination of transparency and low cost empowers developers to build solutions that promote transparency and decentralization -- core values in the crypto environment.
DeepSeek's open nature provides the crypto community with unique opportunities to integrate advanced AI directly into decentralized systems. The model allows the development of autonomous agents that can learn, improve themselves and perform complex tasks without human intervention.
These agents can be used for everything from automated financial services in DeFi platforms to smart contracts that continuously optimize themselves.
“Open source AI combined with blockchain represents the perfect partnership,” stated an analyst from Lilypad Network. The technology also allows for rapid innovation in Web3 applications, where blockchain and AI together can transform both the financial sector and digital services.
“An open model with this performance lays the foundation for the agentic economy of the future,” stated an analyst from Virtuals Protocol. The technology also allows for rapid innovation in Web3 applications, where blockchain and AI together can transform both the financial sector and digital services.
“Open source models like DeepSeek are exactly what we need for true decentralization,” says an expert from Binance Square. Many see this as a turning point where innovation is no longer held back by closed systems or high costs.
Several leading protocols for agentic AI also tell X that even before the latest DeepDesk hype, they have adopted DeepSeek as one of the AI language models they have integrated. This applies to Eliza and Wayfinder, among others.
The launch of DeepSeek marks a turning point in the global AI race. American companies now face a Chinese competitor that delivers state-of-the-art technology with minimal resources. This raises questions about whether the United States can maintain its dominance in artificial intelligence.
Despite U.S. export controls on high-end chipper, DeepSeek has found innovative ways to leverage older hardware, showing that necessity can drive forward cutting-edge innovation. “We thought this technology would cost hundreds of billions of dollars to develop,” says a Binance Square analyst, “but DeepSeek shows that efficiency and transparency can be just as important as raw computing power.”
DeepSeek's success marks the start of a new era in artificial intelligence. Where U.S. companies have long dominated the field with closed systems and astronomical budgets, DeepSeek shows that there are alternatives that are both cheaper, more efficient and more accessible.
Consumers are once again the big winners in this development, but for the established players this is a warning sign. If DeepSeek can deliver state-of-the-art technology with minimal resources, the entire industry needs to rethink its strategies -- fast.
The question now is not only how American companies will respond to the challenge from DeepSeek, but also how this will affect the balance of innovation, geopolitics and economics in the years ahead.
This article has been researched and prepared in several ways: using the author's knowledge, overview and narrative ability, via good old-fashioned search, using an analytic-based human-to-agent dialogue and through a personal quality assurance of content and sources.
