The launch of the AI model DeepSeek has significantly impacted the market, with NVIDIA (NVDA, Financial) experiencing a drop of over 8% in its stock price. Broadcom (AVGO) also saw a decline of nearly 5%. Additionally, SoftBank Group's (9984.JP) stock fell by almost 6%, marking its largest decrease since November last year, while the Nikkei 225 index turned negative.
DeepSeek's popularity is surging, becoming the first app to simultaneously top the free app download charts in both China and the US on Apple's platform, surpassing ChatGPT. The app's user traffic spike even caused temporary server issues.
DeepSeek's success is attributed to its cost-effective performance, comparable to OpenAI's offerings, earning it the nickname "the Pinduoduo of AI," contrasting with ChatGPT's "Hermès of AI" label. As an open-source model under the MIT license, it supports free commercial use and modifications, challenging the dominance of US open-source models like Meta's globally.
DeepSeek-V3 achieved a significant milestone by training a 671 billion parameter model using only 2,048 H800 GPUs at a cost of $5.576 million, far less than top models like GPT-4, which required $1 billion and 25,000 NVIDIA GPUs. This efficiency suggests DeepSeek may challenge NVIDIA's leadership in AI hardware, potentially reducing NVIDIA's orders this year.
Last week, data from StockWe.com showed institutional traders sold $160 million in NVIDIA call options, indicating a bearish trend.
