DeepSeek's Model Release Triggers Market Turmoil and Revaluation
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
- Market Turmoil: DeepSeek's release of the V3 model in late 2024 caused Nvidia's stock to plummet 17% in a single day, erasing nearly $600 billion in market value, highlighting the panic over China's AI competitiveness.
- Revaluation of Expectations: The January 2025 launch of the R1 model exceeded expectations, prompting analysts to reassess China's position regarding frontier model costs and competitiveness, which directly impacted the semiconductor and hyperscaler sectors.
- Stable Spending: Despite initial fears of declining demand for AI hardware, analysts noted that spending remained steady throughout 2025, with forecasts indicating a potential acceleration in 2026, reflecting a recovery in market confidence towards AI investments.
- Computational Limitations: The delay of DeepSeek's R2 model due to computational bottlenecks underscores China's limitations in accessing high-performance computing resources, further emphasizing the challenges posed by reliance on U.S. technology.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
