It's a Sputnik moment for the US as the Chinese upstart torpedoes ChatGPT

China's DeepSeek AI chatbot has caught the US off guard and sent shares into freefall

- CLAUDIA COCKERELL

When Russia launched Sputnik 1, the first satellite into space in 1957, the West was caught off-guard. The USA lagged behind in its own development of spacecrafts, and scrambled into action. This was the start of the space race, and Nasa would be founded the following year.

Nearly 70 years and 12 men on the moon later, and commentators are saying artificial intelligence is having its own Sputnik moment. America is home to all of the top 10 AI companies, yet a previously unknown Chinese AI model crash landed onto the scene last week, soaring to the top of the App Store and sending US tech stocks spiralling. Is this the start of the interface race? DeepSeek's free, Al-powered chatbot called V3 was released in December last year, while the more advanced R1 came out on January 20 and quickly caught the attention of the tech industry. V3 can have conversations, solve maths equations, write advanced code and generate poetry just as capably as its competitors, like OpenAl's ChatGPT, while R1 can also work through complex reasoning problems step by step.

What sets DeepSeek's chatbot apart from its rivals is how cheaply it was developed. Its engineering team claim it needed only around $6 million and two months to train the AI model for V3. This is peanuts in the tech world: Meta recently spent around 10 times that figure building its latest AI technology. Yet this relative minnow carved out a $1 trillion hole in America's tech-heavy Nasdaq stock exchange. Nvidia, which develops chips and software which power AI, shed nearly $600 billion in market value, losing its standing as the world's most valuable company.

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