DeepSeek is China’s answer to ChatGPT. Developed by Liang Wenfeng, a machine vision expert and former hedge fund manager, DeepSeek is turning heads.
It delivers top-tier AI performance at a fraction of the cost of its U.S. counterparts. Let’s break down what’s happening in crypto markets and why your portfolio might be taking a nosedive.
OpenAI has raised over $17 billion to develop ChatGPT. Also, DeepSeek? Just $6 million. Yet, DeepSeek matches ChatGPT’s capabilities while using fewer GPUs, less energy, and smarter algorithms. Even more groundbreaking? It’s open-source. This allows anyone to build on its architecture, opening doors that closed systems like ChatGPT keep locked.
I told DeepSeek r1 to make a video explaining blockchain and this was the result! Insane!
Prompt:
write code for making a video explaining blockchain pic.twitter.com/HfH2dcPz2a— Jashan Pratap (@jashandotsol) January 26, 2025
Liang Wenfeng and his team trained DeepSeek using innovative methods that are not only efficient but also disruptively cheaper. The result? A smaller, faster, and cheaper AI model that’s rocking the tech world.
DeepSeek for dummies:
I did the research to translate the hype, fear, and technical jargon into normal human speak.
Here are 6 things oughta know about Deepseek AI and how to stay ahead of the AI curve… Also why it matters to U.S. national security and energy. pic.twitter.com/73tM5doDMV
— Bitcoin Dad (@bitcoin_dad) January 28, 2025
DeepSeek’s lean-and-mean approach is shaking the foundation of AI development:
- Smaller models: Only the necessary algorithms are activated for each task.
- Affordable hardware: Runs on gaming GPUs instead of high-cost data center chips.
- Streamlined training: DeepSeek was trained for just $5 million, while competitors like OpenAI spent over $100 million.
Why the Market Meltdown?
DeepSeek’s launch has sent shockwaves through global markets. For years, U.S. tech giants like Nvidia and Microsoft thrived on the belief that American AI was untouchable. DeepSeek shattered that myth. Investors are realizing:
- You don’t need billions to create game-changing AI.
- China is rapidly closing the AI gap.
This realization is triggering a revaluation of overhyped AI stocks, causing a selloff in the Nasdaq. The bleeding isn’t stopping there—crypto is taking a hit, too. For example, the stock market just lost $1 Trillion in value just yesterday.
The stock market just lost $1 Trillion in value today.
All because a company out of China dropped a new AI Model called DeepSeek R1, which is much better and only costs $6 million, versus American tech companies spending billions.
China’s release of Deepseek a day after Trump… pic.twitter.com/drB4DRSPZ1
— Andrew Lokenauth | TheFinanceNewsletter.com (@FluentInFinance) January 27, 2025
Why Is Crypto Feeling the Heat?
When investors panic, they ditch speculative assets first, and crypto is often top of that list. Bitcoin and Ethereum are down as liquidity drains from the market.
🚨Why is market crashing?
➬ China launched “DeepSeek,” an AI rival to ChatGPT, built for less than $10M.
➬ ChatGPT, on the other hand, has raised nearly $17B.
➬ DeepSeek is already the #1 free app on the Apple App Store.
➬ This is making people question if the US… pic.twitter.com/RKPhBnoJYz
— Master of Crypto (@MasterCryptoHq) January 27, 2025
But don’t throw in the towel just yet. This could be a classic “buy the dip” moment.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
