Tech Stocks Dive As China Rolls Out Free AI App DeepSeek Using American AI Technology Made by Nvidia (NVDA)

American tech stocks took a beating today with the news of Chinese app DeepSeek – a cheaper open-source AI model. Make no mistake, this is warfare and AI is super weaponry.

Deng Xiaoping: “hide your strength and bide your time.”

Very red day on the US stock market today – trillion dollars lost. pic.twitter.com/swsLCTIhRq

— Open Source Intel (@Osint613) January 27, 2025

The USG has been giving China a free pass on intellectual theft and forced transfer of intellectual property for decades. Hell, then President Bill Clinton gave highly sensitive technical information ignoring the national security experts who counseled against it. Clinton withheld information and covered up the Chinese theft of super-secret W-88 nuclear warhead technology.

They have been stealing form us as a matter of policy. They have been playing the long game, while America has been playing at all. The tortoise and the hare.

American firms with factories in China with intellectual property are even more vulnerable to theft.

Roughly 80% of all federal economic espionage prosecutions have alleged conduct that would benefit the Chinese state, and about 60% of all trade secret theft cases have had a nexus to China.

What did everyone think would happen?

“Deepseek R1 is AI’s Sputnik moment,” Marc Andreessen.

CHINA: Chinese AI firm DeepSeek has 50,000 NVIDIA H100 AI GPUs says CEO, even with US restrictions. Chinese AI company DeepSeek says its DeepSeek R1 model is as good, or better than OpenAI's new o1 says CEO: powered by 50,000 NVIDIA H100 AI GPUs.https://t.co/aA1bVNsNGl

— @amuse (@amuse) January 26, 2025

Back in 2020, Attorney General Barr said:

the PRC’s plans to dominate the world’s digital infrastructure through its “Digital Silk Road” initiative.  I have previously spoken at length about the grave risks of allowing the world’s most powerful dictatorship to build the next generation of global telecommunications networks, known as 5G.  Perhaps less widely known are the PRC’s efforts to surpass the United States in other cutting-edge fields like artificial intelligence.  Through innovations such as machine learning and big data, artificial intelligence allows machines to mimic human functions, such as recognizing faces, interpreting spoken words, driving vehicles, and playing games of skill such as chess or the even more complex Chinese strategy game Go.  AI long ago outmatched the world’s chess grandmasters.  But the PRC’s interest in AI accelerated in 2016, when AlphaGo, a program developed by a subsidiary of Google, beat the world champion Go player at a match in South Korea.  The following year, Beijing unveiled its “Next Generation Artificial Intelligence Plan,” a blueprint for leading the world in AI by 2030.  Whichever nation emerges as the global leader in AI will be best positioned to unlock not only its considerable economic potential, but a range of military applications, such as the use of computer vision to gather intelligence.

The PRC’s drive for technological supremacy is complemented by its plan to monopolize rare earth materials, which play a vital role in industries such as consumer electronics, electric vehicles, medical devices, and military hardware.  According to the Congressional Research Service, from the 1960s to the 1980s, the United States led the world in rare earth production.[6]  “Since then, production has shifted almost entirely to China,” in large part due to lower labor costs and lighter environmental regulation.[7]

The United States is now dangerously dependent on the PRC for these materials.  Overall, China is America’s top supplier, accounting for about 80 percent of our imports.  The risks of dependence are real.  In 2010, for example, Beijing cut exports of rare earth materials to Japan after an incident involving disputed islands in the East China Sea.  The PRC could do the same to us.

CHINA: China is illegally using American Ai technology made by $NVDA to build a powerful Ai model called DeepSeek R1. The LLM was released it for free using an open source license. This is a massive blow to US Ai companies like OpenAi and Antropic. pic.twitter.com/v2MSiOBItg

— @amuse (@amuse) January 26, 2025

China trolling for DoD intel https://t.co/HmpT3lTbNc

— 🇺🇸 Pamela Geller 🎗️🇮🇱 (@PamelaGeller) January 27, 2025

Deng Xiaoping: “hide your strength and bide your time."

The USG has been giving China a free pass on intellectual theft and forced transfer of intellectual property for decades. Hell, then President Bill Clinton gave highly sensitive technical information ignoring the national… https://t.co/WUVm5CwEkB

— 🇺🇸 Pamela Geller 🎗️🇮🇱 (@PamelaGeller) January 27, 2025

https://x.com/burrytracker/status/1883898467317387288

Chinese app DeepSeek hammers US stocks with cheaper open-source AI model

DeepSeek was downloaded 1.6 million times in the US this month

By: Fox Business, January 27, 2025:

U.S. tech shares tumbled on Monday after the popularity of Chinese AI startup DeepSeek raised concerns among investors over American dominance in the sector.
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The tech-heavy Nasdaq Composite plunged more than 2.6% in early trading. The Dow Jones Industrial Average was down more than 100 points and the S&P 500 was down more than 1.5%.

DeepSeek is gaining attention in Silicon Valley as the company appears to be nearly matching the capability of chatbots like OpenAI’s ChatGPT, but at a fraction of the development cost.

Nvidia shares were hit the hardest, falling more than 11%, and led other tech companies lower. Arm Holdings and Advanced Micro Devices were lower by 8% and 5.5%, respectively. Microsoft shares slid 3.5%.

DeepSeek has surged in popularity in global app stores since the app was released earlier this month, having been downloaded1.6 million times by Jan. 25 in the U.S. and ranking No. 1 in iPhone app stores in Australia, Canada, China, Singapore, the U.S. and the U.K. Unlike ChatGPT and other major AI competitors, DeepSeek is open-source, allowing developers to offer their own improvements on the software.

The company unveiled R1, a specialized model designed for complex problem-solving, on Jan. 20, which “zoomed to the global top 10 in performance,” and was built far more rapidly, with fewer, less powerful AI chips, at a much lower cost than other U.S. models, according to the Wall Street Journal.

Meta’s Chief AI scientist, Yann LeCun, took to social media to speak about the app and its rapid success.

A chatbot app developed by the Chinese AI company DeepSeek (Getty Images / Getty Images)

He pointed out in a post on Threads, that what stuck out to him most about DeepSeek’s success was not the heightened threat created by Chinese competition, but the value of keeping AI models open source, so anyone could benefit.

“It’s not that China’s AI is ‘surpassing the US,’ but rather that ‘open source models are surpassing proprietary ones,’” LeCun explained.

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OpenAI ChatGPT