How It Shook the Crypto Market and What’s Next

The unexpected emergence of DeepSeek, a Chinese AI startup, sent shockwaves through the AI industry and financial markets, including crypto.

With its cutting-edge technology and cost-efficient model, DeepSeek has positioned itself as a formidable competitor to Western AI giants.

However, its impact extended beyond the tech sector, triggering a significant downturn in global markets, particularly the US stock market and the crypto space.

In this post, we will explore the rise of DeepSeek, its disruptive effects on the financial and crypto markets, and what the future holds.

We will also examine whether the market, especially crypto, will recover, considering the prevailing bull run of 2025.

What Is DeepSeek? A Game-Changer in AI

DeepSeek is a Chinese-based AI company that recently released its V3 model, an advanced AI assistant that quickly gained traction, becoming the most downloaded free app on the US iOS App Store.

Unlike its competitors, DeepSeek was trained efficiently with approximately 2,000 Nvidia H800 GPUs over 55 days at a fraction of the cost incurred by US-based AI giants.

This strategic cost-effectiveness and rapid adoption set DeepSeek apart, making it a force to be reckoned with in the AI sector.

DeepSeek has continued to gain significant attention, but why is it seen as a threat to other AI companies, particularly in the US?

And why has it caused such a disruption in the tech and financial markets?

To understand this, let’s compare DeepSeek’s development to other leading AI models.

Comparing DeepSeek with Other AI Models

DeepSeek’s V3 model has proven to be on par with leading AI systems in areas such as logical reasoning, coding, and problem-solving.

 What makes it stand out is its efficiency, achieving high performance without the heavy computational costs associated with models like OpenAI or Google’s Gemini.

Unlike Western AI firms, which rely on massive funding and infrastructure investments, DeepSeek was able to develop a competitive model at just $5.58 million.

In contrast, U.S. AI initiatives have received significant funding. For instance, the U.S. government has committed over $3 billion to AI research and development.

Additionally, a private sector consortium, including OpenAI, SoftBank, and Oracle, has announced an investment of up to $500 billion in AI infrastructure through the Stargate project.

The table below shows how DeepSeek compares to OpenAI and Google’s Gemini.