China’s latest AI flex, DeepSeek, just blew a hole in Silicon Valley, leaving the world’s biggest tech players scrambling.
The impact of the Chinese ChatGPT copycat — leaner, faster and cheaper than its rivals — has left big US tech names bleeding red.
And it’s not the only Chinese newcomer. Over the past week, Bytedance’s Doubao-1.5 Pro and Moonshot’s Kimi k1.5 have also entered the ring, turning up the heat on Wall Street.
China’s “same-thing-for-less” game is in full swing. ByteDance’s earlier Doubao AI model operates 85% cheaper than its peers, according to Goldman Sachs.
Read more: DeepSeek shocker erases over $1 trillion from Big Tech
That’s a hard pill to swallow for US tech giants, which are still struggling to show investors material return-on-investment for the buckets of AI money they’ve been splurging in recent years.
The fallout to all of this is that Big Tech’s drowning in red ink to start the week, with over $1 trillion wiped out in New York pre-market trading. Meanwhile, Chinese giants Alibaba and Tencent — both with stakes in Moonshot — are dancing in the green in Hong Kong, up 3% and 1.3%, respectively.
Goldman Sachs has singled out these two names as potential winners from the AI hype, along with Chinese data-center stocks GDS Holdings and VNET Group. The versions of these stocks trading in the US (ADRs) are up more than 2% in premarket on Monday.
For now, China’s making moves, and Silicon Valley’s feeling the sting.
Edited by Tim Hume and Azar Zaidi. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
