What is DeepSeek, the Chinese AI startup that shook the tech world? | Money [Video]

(CNN) — A surprisingly efficient and powerful Chinese AI model has taken the technology industry by storm. It’s called Deepseek R1, and it’s rattling nerves on Wall Street.

The new AI model was developed by DeepSeek, a startup that was born just a year ago and has somehow managed a breakthrough that famed tech investor Marc Andreesen has called “AI’s Sputnik moment”: R1 can nearly match the capabilities of its far more famous rivals, including OpenAI’s GPT-4, Meta’s Llama and Google’s Gemini – but at a fraction of the cost.

The company said it had spent just $5.6 million training its newest AI model, compared with the hundreds of millions, if not billions of dollars US companies spend on their AI technologies. That’s even more shocking when considering that the United States has worked for years to restrict the supply of high-power AI chips to China, citing national security concerns. That means DeepSeek was …