Bitcoin: $83,312.00(-3.47%) 
Ethereum: $2,109.92(-3.5%) 
Tether: $0.9998(0.01%) 
XRP: $2.19(-7.07%) 
BNB: $567.54(-5%) 
Solana: $133.13(-3.23%) 
USDC: $0.9999(0%) 
Cardano: $0.7650(-6.69%) 
Dogecoin: $0.1810(-7.48%) 
TRON: $0.2415(-1.9%) Bitcoin: $83,312.00(-3.47%) Ethereum: $2,109.92(-3.5%) Tether: $0.9998(0.01%) XRP: $2.19(-7.07%) BNB: $567.54(-5%) Solana: $133.13(-3.23%) USDC: $0.9999(0%) Cardano: $0.7650(-6.69%) Dogecoin: $0.1810(-7.48%) TRON: $0.2415(-1.9%) DeepSeek AI Sparks Market Turmoil, Shaking Tech and Crypto Sectors
January 27, 2025
The artificial intelligence (AI) landscape is experiencing a seismic shift as DeepSeek’s cost-efficient model gains traction, triggering significant market movements across multiple sectors. AI-focused cryptocurrencies saw a sharp decline of 9% during Asian trading hours, while chip-related stocks in Japan took a substantial hit amid concerns that DeepSeek’s success could disrupt established players like OpenAI and Nvidia. This development is also causing broader market uncertainty, with Nasdaq futures tumbling as investors reassess the valuation of major tech firms.
DeepSeek's rise is particularly noteworthy due to its financial efficiency. Unlike OpenAI, which relies on massive investments and computing power, DeepSeek has demonstrated that cutting-edge AI can be developed with just $6 million and a fraction of the typical GPU usage. This revelation has raised concerns over potential declines in GPU demand, which could impact semiconductor firms that cater to AI infrastructure. As a result, major Japanese chip stocks, including Advantest, Tokyo Electron, and Renesas Electronics, experienced sharp sell-offs, with losses ranging from 1.24% to 8.6%.
Meanwhile, the GameFi sector, which blends blockchain technology with gaming, continues to face its own challenges. Despite a reported 421% increase in daily active users, overall investment in the sector has plummeted, dropping 38% from its 2020 peak. The sector, currently valued at $19 billion, struggles to compete with traditional gaming giants and has yet to establish a strong foothold outside of decentralized finance (DeFi). Experts believe that both GameFi and AI-powered cryptocurrencies will need to innovate rapidly to regain investor confidence and secure long-term viability.
Adding to the financial turmoil, the growing influence of DeepSeek has sent ripples through the stock market. SoftBank, a major investor in AI and chip design, saw an 8.3% plunge in its stock price. Concerns over the affordability of DeepSeek’s AI models have also led analysts to question whether big tech companies have overestimated their pricing power. Investors are now speculating whether the AI boom, once driven by billion-dollar investments, might be forced to adapt to a leaner and more cost-effective landscape.
With DeepSeek becoming the most downloaded app on Apple’s iPhone, the industry is bracing for continued volatility. As capital markets reassess the valuation of dominant tech firms, the coming months could see a wave of strategic realignments and competitive responses. Whether DeepSeek’s cost-efficient model marks the beginning of a new AI era or a temporary disruption remains to be seen, but its impact on global markets is already undeniable.
DeepSeek's rise is particularly noteworthy due to its financial efficiency. Unlike OpenAI, which relies on massive investments and computing power, DeepSeek has demonstrated that cutting-edge AI can be developed with just $6 million and a fraction of the typical GPU usage. This revelation has raised concerns over potential declines in GPU demand, which could impact semiconductor firms that cater to AI infrastructure. As a result, major Japanese chip stocks, including Advantest, Tokyo Electron, and Renesas Electronics, experienced sharp sell-offs, with losses ranging from 1.24% to 8.6%.
Meanwhile, the GameFi sector, which blends blockchain technology with gaming, continues to face its own challenges. Despite a reported 421% increase in daily active users, overall investment in the sector has plummeted, dropping 38% from its 2020 peak. The sector, currently valued at $19 billion, struggles to compete with traditional gaming giants and has yet to establish a strong foothold outside of decentralized finance (DeFi). Experts believe that both GameFi and AI-powered cryptocurrencies will need to innovate rapidly to regain investor confidence and secure long-term viability.
Adding to the financial turmoil, the growing influence of DeepSeek has sent ripples through the stock market. SoftBank, a major investor in AI and chip design, saw an 8.3% plunge in its stock price. Concerns over the affordability of DeepSeek’s AI models have also led analysts to question whether big tech companies have overestimated their pricing power. Investors are now speculating whether the AI boom, once driven by billion-dollar investments, might be forced to adapt to a leaner and more cost-effective landscape.
With DeepSeek becoming the most downloaded app on Apple’s iPhone, the industry is bracing for continued volatility. As capital markets reassess the valuation of dominant tech firms, the coming months could see a wave of strategic realignments and competitive responses. Whether DeepSeek’s cost-efficient model marks the beginning of a new AI era or a temporary disruption remains to be seen, but its impact on global markets is already undeniable.