U.S. stocks have recently dropped on Monday, January 20th due to the public release of the new A.I, DeepSeek, and their newest chatbot model for the A.I, being named R1.

Stocks from tech industries like Nvidia, a company that produces chips for A.I – training, has mainly been negatively affected, allegedly losing around a total of $588.8 billion in market value and doubling how much they lost when META first got introduced, according to a CNN NEWS article. ( Goldman, Jan, 26, 25 ).

According to a section located inside of an AP NEWS article, a paper was published last week, which so happened to be the same day as President Donald Trump’s inauguration.

The contents of the paper apparently depicted and showed evidence of how DeepSeek’s model, R1, had the ability to have advanced ‘ reasoning ‘ skills and was significantly cheaper than OpenA.I’s model, 01. ( Goldman, Jan, 26, 25 ).

DeepSeek has stated that its recent and default models were built with Nvidia’s lower – performing H800 chips, since those were the ones that weren’t banned in China. This ultimately led to DeepSeek attracting more attention within the growing A.I industry in the last month or so after they released their new model, R1. Liang Wenfeng, DeepSeek’s CEO, was able to make similar models from Western companies such as OpenA.I and Gemini A.I, even having their models be more cost – effective with their use of Nvidia’s chips used to train the model.

Other companies such META, Alphabet, Google’s parent company, Marvell, Broadcom, Micron, and TSMC were affected as well to name a few, mentioned in the same CNN NEWS article. ( Egan, Jan, 26, 25 ).

DeepSeek’s recent popularity has also, as stated in the AP NEWS article mentioned previously, threatened to undermine a key strategy of U.S. foreign policy in recent years to restrict the sale of American – designed A.I semiconductors to China. ( O’Brian, Jan, 27, 25 ).

“ The technology innovation is real, but the timing of the release is political in nature, ” spoke Gregory Allen, director of the Wadhwani A.I Center at the Center for Strategic and International Studies, in an interview on AP NEWS. ( O’Brian, Jan, 27, 25 )

Marc Andreessen, entrepreneur and known for co-writing one of the world’s first web browsers called Mosaic, wrote on X, on Sunday,” DeepSeek R1 is A.I’s Sputnik moment, ” connecting the application to the space race between the U.S. and the Soviet Union with an event that forced the U.S. to realize that its technological abilities were not unassailable.

Along with this, OpenA.I’s CEO, Sam Altman, ‘ came at ‘ DeepSeek last month allegedly on a tweet on Twitter, that is mentioned in a NBC NEWS article, after some users noticed that V3, another model that DeepSeek uses on their platform that also served as the foundation for R1, would think that it was ChatGPT. ( Yang, Jan, 28, 25 ).

But on Monday, being the same day when U.S stocks crashed, Altman voiced that the new R1 was “ an impressive model, particularly around what they’re able to deliver for the price. ”

“ We will obviously deliver much better models and also it’s legit invigorating to have a new competitor! ” he proceeded to write on X. “ We will pull up some releases. ”