A Chinese AI Lab Nobody Had Heard Of Released a Free Model on a Monday — By Tuesday It Had Wiped $1 Trillion Off the US Stock Market
On January 27, 2025, Nvidia lost $589 billion in a single trading day — the largest one-day loss in US stock market history — because DeepSeek, a small Chinese lab funded by a quant hedge fund, had open-sourced R1: a model matching o1's reasoning ability at roughly 1/30th the training cost, running on export-restricted hardware. By close, the entire US AI infrastructure trade had lost over $1 trillion in market cap. DeepSeek's iOS app hit #1 on the App Store overnight. The White House, Microsoft, OpenAI, and Meta all scrambled for an answer. The narrative that compute moats would protect US AI incumbents collapsed in 24 hours.
On January 27, 2025, Nvidia lost $589 billion in a single trading day — the largest one-day loss in US stock market history — because DeepSeek, a small Chinese lab funded by a quant hedge fund, had open-sourced R1: a model matching o1's reasoning ability at roughly 1/30th the training cost, running on export-restricted hardware. By close, the entire US AI infrastructure trade had lost over $1 trillion in market cap. DeepSeek's iOS app hit #1 on the App Store overnight. The White House, Microsoft, OpenAI, and Meta all scrambled for an answer. The narrative that compute moats would protect US AI incumbents collapsed in 24 hours.
Weirdness Classification
9/10 — Deeply unhinged
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