DeepSeek's Disruption: A Jolt to Global AI Markets

A Chinese startup, DeepSeek, has shaken global stock markets by unveiling a cost-effective AI assistant. This development has sparked concerns about the massive capital expenditure in AI by big players like Google and OpenAI, questioning if such high investments are necessary.

In an unexpected turn of events, global stock markets were jolted after a Chinese startup, DeepSeek, introduced a low-cost AI assistant. This revelation has ignited concerns about the heavy investments in AI by major players such as Google and OpenAI.

DeepSeek's announcement challenged the prevailing narrative, leading to a sell-off in tech stocks. Particularly hard-hit was Nvidia, which saw a 17% drop on Monday, while ripple effects were felt in markets from Tokyo to New York.

The innovative approach of DeepSeek raises questions about the necessity of massive capital spending in AI technology, putting pressure on companies to reassess their strategies amidst volatile market conditions.

(With inputs from agencies.)