The world of the technology industry experienced an unexpected shock earlier this week. The Chinese startup DeepSeek, which has only been around for a year, unveiled its groundbreaking artificial intelligence (AI) R1. This model, comparable to ChatGPT from US company OpenAI, is revolutionising the way technology works at a fraction of the cost of giants like OpenAI, Google and Meta. This news has shaken not only the technology industry but also the financial markets.
Unexpected competition at a fraction of the cost
DeepSeek announced that it had spent just $5.6 million to develop the R1 model, an almost negligible amount compared to the billions of dollars invested by US technology companies. According to the Wall Street Journal, this ultra-low price was one of the key factors that stunned analysts and investors. Meta $META, for example, plans to invest $65 billion in AI development this year alone, while OpenAI CEO Sam Altman has said in the past that the entire sector will require…