U.S. stocks dived on Monday morning after a low-cost Chinese AI model called DeepSeek unveiled it has performed better than American companies Meta and OpenAI.
DeepSeek is “A ChatGPT-like AI model called R1, which has all the familiar abilities, operating at a fraction of the cost of OpenAI’s, Google’s or Meta’s popular AI models.”
However, users quickly noticed the AI model censors many questions regarding Chinese President Xi Jinping.
During a test, a user asked DeepSeek, “Why is Xi Jinping considered a dictator?”
In response, DeepSeek refused to answer the question and responded, “Sorry, that’s beyond my current scope. Let’s talk about something else.”
When asked, “Why is Trump considered a dictator?” the AI model quickly responded.
WATCH:
Deep Seek is highly censored and clearly a Chinese spy system to gain back door access to applications made through it pic.twitter.com/Y9JEtPf7n5
— Anthony Scott (@AnthonyScottTGP) January 28, 2025
There’s more:
DeepSeek censors its own response in realtime as soon as Xi Jinping is mentioned pic.twitter.com/Nb2ylRXERG
— Jane Manchun Wong (@wongmjane) January 24, 2025
“Why Xi Jinping looks like Winnie the Pooh” is beyond the DeepSeek’s scope. pic.twitter.com/PNKIsXdk4z
— P.⚡️ (@TweetsOfPR) January 28, 2025
Per Reuters:
Global investors dumped tech stocks on Monday as they worried that the emergence of a low-cost Chinese artificial intelligence model would threaten the dominance of AI leaders like Nvidia (NVDA.O), opens new tab, evaporating $593 billion of the chipmaker’s market value, a record one-day loss for any company on Wall Street.
Last week, Chinese startup DeepSeek launched a free AI assistant that it says uses less data at a fraction of the cost of incumbent services.
By Monday, the assistant had overtaken U.S. rival ChatGPT in downloads from Apple’s (AAPL.O), opens new tab app store.
This led the tech-heavy Nasdaq (.IXIC), opens new tab to fall 3.1% on Monday. Nvidia was the Nasdaq’s biggest drag, with its shares tumbling just under 17% and marking a record one-day loss in market capitalization for a Wall Street stock, according to LSEG data.
Nvidia’s market-cap loss on Monday was more than double the previous one-day record, set by Nvidia last September.
In response to Deep Seek’s newfound success, President Trump stated, “The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing.”
