What is DeepSeek and why did US tech stocks fall?

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1. What is DeepSeek and why did US tech stocks fall?

DeepSeek, a Chinese artificial intelligence company, aims to create AGI, a human-level intelligence that no technology firm has yet achieved. The company's AI model, the R1 model, uses a different internal architecture that reduces computational costs and is capable of tackling complex reasoning tasks.

It took two months and less than $6m to develop, but is significantly less than the billions spent by Silicon Valley tech companies on AI development. DeepSeek's performance has caused a fall in US tech stocks, as tech companies are considering whether to buy their tools. While DeepSeek has not reached AI general intelligence, it is doing what others can at a fraction of the cost.

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2. Apple Enlists Veteran Software Executive to Help Fix AI and Siri

Apple executive Kim Vorrath has been moved to Apple's artificial intelligence and machine learning division, where she will serve as a top deputy to AI chief John Giannandrea.

The move aims to make Apple a leader in AI, a field where the company has struggled to match the capabilities of competitors like OpenAI, Meta Platforms, and Google. Vorrath has spent 36 years at Apple and has previously managed software projects and hardware engineering.

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3. ElevenLabs has raised a new round at $3B+ valuation led by ICONIQ Growth

ElevenLabs, a New York startup that develops synthetic voice technology, has raised $250 million in a Series C round valued between $3 billion and $3.3 billion.

The round is led by ICONIQ Growth and is expected to announce the funding announcement this month. ElevenLabs, founded in 2022, aims to improve AI voice dubbing in the audio industry.

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4. ChatGPT back online after outage which hit thousands worldwide

ChatGPT, an AI chatbot created by OpenAI, experienced an outage in the UK, causing over 10,000 users to access it. The bot experienced a gateway error, and OpenAI has since implemented a fix. The outage caused widespread disruption, with users expressing frustration on social media.

ChatGPT has sparked global interest in generative AI tools, with OpenAI claiming it was used by over 300 million people weekly by December 2024. The outage comes after tech firms like OpenAI pledged a $500bn investment in US AI infrastructure.

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5. Nvidia calls China’s DeepSeek R1 model ‘an excellent AI advancement’

Nvidia has praised DeepSeek's R1 model as an excellent AI advancement, despite its stock price plummeting 17%. DeepSeek's open-source reasoning model, R1, outperformed the best models from US companies like OpenAI, with a self-reported training cost of less than $6 million. Nvidia sees DeepSeek's breakthrough as creating more work for its graphics processing units.

Analysts are now questioning if multi-billion dollar capital investments from companies like Microsoft, Google, and Meta are being wasted when the same results can be achieved more cheaply.

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