Throughout the week, everyone is talking about DeepSeek, a generative artificial intelligence originally from China. Its appearance on everyone’s lips coincided with the beginning of the presidency of Donald Trump, who promised to make the United States a leader in artificial intelligence (AI) and cryptocurrencies.
At the same time, however, OpenAI panicked and decided to halve the cost of ChatGPT Plus subscriptionfrom $20 to $10. DeepSeek’s R1 model partially outperformed OpenAI’s o1. And it is free of charge.
Amid the hype around DeepSeek bitcoin (BTC) dropped below $100 thousand. Other cryptocurrencies, especially those related to AI, also fell in price. The NASDAQ closed with a loss of 3%, and NVIDIA shares fell by a staggering 17%. Mining company Core Scientific lost 29% of its capitalization. Hut 8, Riot Platforms, and Cipher Mining also suffered significant losses. Interestingly, this is partly due to their integration into the AI sphere: many of these companies are converting their mining farms into data centers.
This is a kind of reminder to investors of the overvalued market, which reached 27 times earnings in 2024, writes QCP.
The Trump administration is only considering the idea of creating a national crypto reserve. However, this is not enough to keep the market optimistic: investors remain cautious, waiting for concrete actions and political decisions. The 47th president of the United States himself saidwhich will increase tariffs on imports of semiconductors, pharmaceuticals, and metals. He also considers the breakthrough of the Chinese company DeepSeek «good because it does not need to spend so much money». Trump sees the creation of DeepSeek’s AI as a «wake-up call» for American companies, which should focus on competing «on winning».
DeepSeek, China’s next-generation language model (LLM), threatens US dominance in the AI space with its open architecture and high efficiency. This has caused serious concern in the US stock markets, as China’s growing competitiveness could have a significant impact on AI-related companies.
Ahead is a new turn in the financial world: this Thursday (January 30), the US FOMC is expected to meet, as well as the release of reports from tech companies, which may add to market uncertainty.