Bitcoin, Ethereum, Solana Crash — Here’s Why China’s Low-Cost AI Model DeepSeek May Be To Blame

Chinese AI startup DeepSeek‘s $6 million AI model has rattled global global markets, with experts warning it signals a major shift in AI competition.

What Happened: Speaking with Benzinga, experts suggest the Chinese startup’s efficiency-focused approach is reshaping perceptions of dominance in artificial intelligence, challenging the high-cost strategies employed by US tech giants like OpenAI and NVIDIA (NASDAQ:NVDA).

The model, R1, was developed for under $6 million, according to the company, and has outperformed established competitors in several tests.

Its open-source approach has triggered concerns about the future competitiveness of US technology firms and their spending-heavy AI strategies.

The announcement sent jitters through the markets, with the Nasdaq Composite dropping 2.7%, the S&P 500 sliding 1.6%, and the Dow Jones Industrial Average dipping 0.1%.

DeepSeek’s claims of achieving high-performance AI at a fraction of Silicon Valley’s costs have raised fears of an AI stock …

Full story available on Benzinga.com