DeepSeek reshapes AI markets after a shock

Six months after DeepSeek's US debut, analysts assess whether the Chinese chatbot still commands attention or has faded from the spotlight.

DeepSeek reshapes AI markets after a shock

DeepSeek-R1 surged to the top of the US App Store, presenting itself as a low-cost challenger to ChatGPT. The company claimed rapid deployment and far lower development costs, and the move occurred amid broad AI market attention. Nvidia then faced a dramatic one-day decline that erased about $600bn in market value, the largest single-day drop in US stock history, illustrating how quickly hype can translate into financial moves.

Analysts and investors treated the moment as a geopolitical signal rather than a sure win for any side. A prominent tech investor described the event as a watershed that could redefine who leads in AI, while six months later the questions persist: can DeepSeek sustain momentum, and will independent benchmarks confirm real progress or just headlines?

The episode shows how quickly markets react to bold claims in AI, even when independent verification is scarce. It also highlights how political and national competitiveness narratives can shape investor behavior more than the technology itself. A sharp rally followed by sharp losses underscores the risk of valuing hype over durable capability.

Looking ahead, the story raises questions about sustainability. If DeepSeek can demonstrate reliable performance, clear usage in real apps, and verifiable benchmarks, it could reshape expectations for non-US players in AI. If not, the episode may simply illustrate the mobility of sentiment in a fast-moving field and not a lasting shift in global leadership.

Highlights

The AI race will be defined by endurance, not just speed.