Chinese AI company DeepSeek announced a major breakthrough in artificial intelligence, claiming to have trained a generative AI chatbot at a fraction of the cost and time compared to OpenAI and Google. This news sent shockwaves through the technology sector, leading to a drop in global stock markets. DeepSeek's claims raise questions about the future of the AI industry, potentially disrupting the market by making advanced AI technology more affordable and accessible.
On Monday, 27 January, global stock market s took a hit after Chinese AI company DeepSeek announced a major breakthrough in artificial intelligence.
The Nasdaq index, which includes many tech companies, dropped by 3% on Monday. Shares of some AI-related companies fell even more sharply.According to the experts at Schroder, a global investment firm, DeepSeek’s announcement raises big questions for investors. If the company’s claims are true, it could disrupt the AI industry by making advanced AI technology cheaper and faster to develop.
However, Flood warns that this doesn’t necessarily mean chip demand will drop. A concept called Jevon’s Paradox suggests that when something becomes more efficient, people often use more of it, not less. For example, if AI becomes cheaper, more companies might adopt it, which could actually increase the need for chips.
Costing has been the main topic of discussion, even though specific pricing details for DeepSeek’s AI services are not publicly available yet and DeepSeek’s claims its AI models are trained at a DeepSeek does say though that while South Africans pay around R360 for a ChatGPT subscription every month, they can soon expect lower subscription fees for AI tools that offer ‘the same quality of service.
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