2025-01-27 15:09:56 by bankless

The Chinese AI startup's advances that rival OpenAI has sent shivers down America's capital markets. Subscribe to Bankless or sign in A wave of concern over the open-source, outperformant Chinese AI, DeepSeek, has triggered a broad sell-off in digital assets and global tech equities.What’s the scoop?Crypto Token Sell-Off: Bitcoin briefly dropped under $100K as whales liquidated overleveraged positions, while GPU-heavy tokens saw declines of up to 40% as investors conjectured that this impacted hardware-intensive AI bets.Equities Under Fire: Trad markets took an equal beating, as Nasdaq futures tumbled 700 points and large-cap AI stocks like Nvidia dropped 10% in pre-market trading on fears of how this would impact their productsBackground on DeepSeek: DeepSeek outperformed ChatGPT across several benchmarks and gained international attention for achieving these results at a fraction of the cost, raising questions about the efficiency of American AI training.Bankless TakeWhile DeepSeek is certainly a significant and interesting development, the backdrop of Trump’s tariff threats and the looming FOMC meeting have certainly done nothing to ease uncertainty across the market. Overall, DeepSeek’s performance will spark a substantial investigation into its abilities as well as how it was able to get its hands on GPU chips, which were supposedly restricted, potentially inciting more discussion of tariffs or trade restrictions. On the flip hand, though, DeepSeek may be a powerful catalyst for decentralized AI, introducing a highly performant, open-source model onto the market for crypto to leverage how it sees fit. Assorted quick thoughts on deepseek-There are different layers to the AI stack and deepseek only introduces competition on the model layer.-This is analogous to having a new cheaper API for some data on the Internet. You wouldn't say that's bearish for the Internet, you'd say…— Gammichan (@gammichan) January 27, 2025 Written by David C 342 Articles • View all       David is a writer/analyst at Bankless. Prior to joining Bankless, he worked for a series of early-stage crypto startups and on grants from the Ethereum, Solana, and Urbit Foundations. He graduated from Skidmore College in New York. He currently lives in the Midwest and enjoys NFTs, but no longer participates in them.