DeepSeek's claims that it cost mere millions to build fanned fears that the huge investments into AI by U.S. firms are unwarranted and a bubble waiting to pop.

Nvidia Corp.’s plunge, fueled by investor concern about Chinese artificial-intelligence startup DeepSeek, erased a record amount of stock-market value from the world’s largest company.

According to a paper authored by the lab, the DeepSeek-R1 model outperforms cutting-edge models such as OpenAI’s o1 and Meta’s Llama AI models across multiple benchmarks.

The Chinese AI service has Wall Street worried that it will be cheaper than expected to develop models. But as chip stocks sink, some analysts see a silver lining.

In a matter of days, DeepSeek proved to be so popular as to climb to the top of Apple's App Store, surpassing OpenAI's ChatGPT as the most downloaded app. But for owners of Nvidia stock, and stock traders in general, DeepSeek is on track of becoming a black swan — an unexpected event with extreme consequences.