: [POST-BROADCAST CORRECTION: This report incorrectly says that chip company Nvidia lost half a billion dollars in value as the stock market reacted to the rise of an AI assistant made by a Chinese company. In fact, Nvidia lost about half a trillion dollars in value.]
MARY LOUISE KELLY, HOST:
Today, DeepSeek - that's an AI assistant from a Chinese startup - it became the most downloaded free app in the U.S. Apple Store. That means it dethroned ChatGPT, the American-made AI app. Well, the news is rattling U.S. tech companies. The Nasdaq closed down more than 600 points today. So what do we know so far about the new AI stir in town and why it has tech investors so jittery. For help answering this, we are joined by our business correspondent, Maria Aspan. Hi there.
MARIA ASPAN, BYLINE: Hey there, Mary Louise.
KELLY: Hey. So DeepSeek, I hadn't even heard of it. It seems like it came out of nowhere, and now everywhere I look, it's there today. What is it, exactly?
ASPAN: I mean, I feel the same way. But, specifically, it did come out of China. DeepSeek is a Chinese startup founded more than a year ago by a hedge fund manager named Liang Wenfeng, and it was a virtual unknown until last Monday when it released a free AI assistant - basically, DeepSeek's own version of ChatGPT or Google's Gemini. DeepSeek's chatbot can answer questions, search the web, solve puzzles. And some AI experts have given it rave reviews. They say that it performs almost as well as the established AI models. And DeepSeek says it does that at a fraction of the cost.
Now, that's causing a lot of buzz. The tech investor Marc Andreessen said on X that DeepSeek is one of the most amazing and impressive breakthroughs I've ever seen. And since, in the past week, it's become heavily downloaded, as you mentioned. It's very popular. And in fact, today, DeepSeek said it was the victim of a cyberattack, without offering any further details, and said it actually had to limit registrations for new users.
KELLY: OK, so to sum up, you're saying it's new, it's Chinese. AI experts say it's really impressive. Why then are tech investors reacting so badly in the markets?
ASPAN: Well, it might also be starting a price war. DeepSeek says it spent less than $6 million training one of its AI models. That is incredibly cheap, especially in comparison to what we've heard from some established AI companies, which say they could spend up to $1 billion training models. Now, DeepSeek says it uses less advanced chips, but it's still been able to deliver this product that seems sophisticated and efficient.
I have to say, there are a lot of questions still lingering. DeepSeek did make its technology open-source, but we don't know yet if all of its claims about how cheap and efficient it is will bear out. And it is, of course, a Chinese company...
KELLY: Sure.
ASPAN: ...At a time when trade and tech relations between the U.S. and China are really bad. You know, President Trump has made it clear he wants the U.S. to be the AI leader, so this could also ratchet up tensions between the two countries.
KELLY: So in the stock market today, we said it's down. Who were the big losers?
ASPAN: Well, so we saw a lot of chip companies and tech companies sell off today. And the Nasdaq in particular is very tech stock heavy, so when it has a bad day, that often means something's going on in the tech industry. But there is one biggest loser here, and it is Nvidia. That, of course, is the buzzy chip company that's been dominating the AI hardware race. Last year, we saw Nvidia's stock shoot up so much that it became one of the most valuable companies in the world.
But today, Nvidia had an absolutely terrible day in the stock market. Its shares dropped about 17%, and it lost half a billion dollars in value. That said, Nvidia is almost more important as a bellwether for the larger AI industry. And, as you know, AI has been this big story of the tech industry over the past year. There's been this ongoing question of, is it a bubble?
KELLY: NPR's Maria Aspan, thank you.
ASPAN: Thank you. Transcript provided by NPR, Copyright NPR.
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