Cabot Phillips

A flood watch is in effect for Oklahoma, Arkansas, and Missouri. The system is expected to hit the northeast later this week, bringing rain and possible ice and snow to higher elevations.

A flood watch is in effect for Oklahoma, Arkansas, and Missouri. The system is expected to hit the northeast later this week, bringing rain and possible ice and snow to higher elevations.

Yeah, so for the last year, the general consensus has been that America is leaving the rest of the world in the dust when it comes to artificial intelligence, especially generative AI like ChatGPT. But yesterday, a new player introduced itself in a major way, stunning Silicon Valley and leaving Wall Street in a frenzy.

Yeah, so for the last year, the general consensus has been that America is leaving the rest of the world in the dust when it comes to artificial intelligence, especially generative AI like ChatGPT. But yesterday, a new player introduced itself in a major way, stunning Silicon Valley and leaving Wall Street in a frenzy.

That new force is Chinese startup DeepSeek, which announced Monday that their latest generative AI service, DeepSeek R1, was not only on par with top models like ChatGPT, but but that it had been created, or trained as they put it, at a fraction of the cost. Shortly after the news broke, DeepSeek rocketed to the top spot on the App Store.

That new force is Chinese startup DeepSeek, which announced Monday that their latest generative AI service, DeepSeek R1, was not only on par with top models like ChatGPT, but but that it had been created, or trained as they put it, at a fraction of the cost. Shortly after the news broke, DeepSeek rocketed to the top spot on the App Store.

For more, I spoke with Tom Kalopoulos, an AI expert and author of Giga Trends.

For more, I spoke with Tom Kalopoulos, an AI expert and author of Giga Trends.

Yes, it did. Tech stocks in Europe, Asia, and the U.S. tumbled following the news. By Monday afternoon, Nvidia, which had enjoyed a record-breaking 2024, was down a whopping 15%. That translated to over $500 billion in losses. That's the single largest one-day drop-off of any stock in history.

Yes, it did. Tech stocks in Europe, Asia, and the U.S. tumbled following the news. By Monday afternoon, Nvidia, which had enjoyed a record-breaking 2024, was down a whopping 15%. That translated to over $500 billion in losses. That's the single largest one-day drop-off of any stock in history.

Elsewhere, large AI companies like Micron Technology and Advanced Micro Devices were down 10% and 6% respectively, while Microsoft, which backs OpenAI, fell 3%. Altogether, those dips represented over a trillion dollars in value.

Elsewhere, large AI companies like Micron Technology and Advanced Micro Devices were down 10% and 6% respectively, while Microsoft, which backs OpenAI, fell 3%. Altogether, those dips represented over a trillion dollars in value.

Now, the big reason for that sell-off is that prior to Monday, the general idea was that generative AI required incredibly expensive high-tech chips to operate, chips manufactured by companies like NVIDIA. But DeepSeek appears to have upended that notion, seemingly proving that groundbreaking AI can be trained and operated at a much lower cost and with less complex chips.

Now, the big reason for that sell-off is that prior to Monday, the general idea was that generative AI required incredibly expensive high-tech chips to operate, chips manufactured by companies like NVIDIA. But DeepSeek appears to have upended that notion, seemingly proving that groundbreaking AI can be trained and operated at a much lower cost and with less complex chips.

For context, DeepSeek says they trained their latest model for just $5.6 million. Similar programs here in the U.S. cost anywhere from $100 million to a billion dollars. So you can see why the news sent such a shockwave. Here's Colopolis.

For context, DeepSeek says they trained their latest model for just $5.6 million. Similar programs here in the U.S. cost anywhere from $100 million to a billion dollars. So you can see why the news sent such a shockwave. Here's Colopolis.

Now, keep in mind, this all comes as President Trump just announced a collaboration between the federal government and tech giants OpenAI, Oracle, and SoftBank that will pour up to $500 billion into AI infrastructure here in the U.S. Trump really has made clear that America must lead the way on AI and cannot afford to fall behind China in this new arms race.

Now, keep in mind, this all comes as President Trump just announced a collaboration between the federal government and tech giants OpenAI, Oracle, and SoftBank that will pour up to $500 billion into AI infrastructure here in the U.S. Trump really has made clear that America must lead the way on AI and cannot afford to fall behind China in this new arms race.

For his part, Colopolis views it as a cold war.

For his part, Colopolis views it as a cold war.