Gemini, ChatGPT may lose the AI war to deep-pocketed rival originally appeared on TheStreet.
Gemini, ChatGPT may lose the AI war to deep-pocketed rivals
Markets have been jittery this year, and it all goes back to a single seismic moment in January.
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From ChatGPT to Gemini, AI sparked a massive stock market boom, with tech stocks soaring and early adopters laughing their way to the bank.
Billions in market value have been added, thanks to a sustained long-term tailwind in AI.
Many in the U.S. saw AI as a closed club run by a few gatekeeper tech giants.
Earlier this year, in January, the ‘DeepSeek’ moment cracked that lock wide open, triggering one of the largest slides in tech stock history.
Ever since, Mr. Market’s been on edge, and now, with what dropped yesterday, it’s looking like another shockwave could be on the way.
Gemini and ChatGPT lit the fuse, now China’s AI is catching fireStefano Guidi/Getty Images
DeepSeek burst onto the scene this year, shaking things up in AI.
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The Hangzhou-based startup, barely a year old, dropped its R1 chatbot, leaving experts in disbelief.
The chatbot boasted an open-weight model with a training cost of just $6 million, way below the eye-watering budgets of its American peers.
Its launch set off a brutal tech stock sell-off, one of the biggest we’ve seen in a long time.
DeepSeek’s launch on January 27 led the Nasdaq to a concerning 3.1% drop, while the S&P 500 slid almost 2%.
Investors freaked out over the remarkably cheap, open-source AI proposition.
In premarket trading that morning, Nvidia stock sank 13%, erasing north of $500 billion in market cap at the open.
Moreover, the broader “Magnificent 7” group, including the likes of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, lost a combined $1 trillion in market cap.
Right after DeepSeek dropped R1, it took off fast.
The app shot to No. 1 on Apple’s U.S. App Store, bumping ChatGPT, while topping charts in 50+ countries.
By late May, the Chinese AI powerhouse was already back with a major upgrade.
The new R1-0528 dropped on Hugging Face, packed new system prompts, function-calling, all while cutting hallucinations by roughly 50% and doubling the chain-of-thought window. They even rolled out a lightweight version on a single GPU, making advanced AI more DIY-friendly.
Behind the scenes, OpenAI launched a probe into whether DeepSeek had scraped ChatGPT’s data to train its model, adding more fuel to the AI wars.
President Trump jumped on the moment, calling it a “wake-up call” for U.S. tech to get serious about AI. Meanwhile, Apple’s Tim Cook visited Beijing and praised DeepSeek’s models, calling them “excellent”.
