$BTC

Recently, a Chinese startup developed an AI model called DeepSeek at a cost of $6 million.

In comparison, US-based OpenAI (ChatGPT) has raised $17.9 billion to date.

But DeepSeek surpassed its performance at less than 1% of ChatGPT’s cost, setting off a chain reaction in global markets.

The underlying reason: a reversal of market sentiment

Many U.S. technology stocks, especially leading companies in the field of artificial intelligence, such as Nvidia and Microsoft, have grown significantly in the past few years due to the A.I. narrative.

However, the emergence of DeepSeek has disrupted the perception that 'the U.S. leads the world in artificial intelligence.'

This change in perception has led investors to worry that U.S. tech companies' valuations are severely overestimated, prompting a sell-off in U.S. stocks:

Nasdaq 100 futures fell by 2%, triggering panic.

The decline in U.S. stocks has also dragged down the cryptocurrency market.

DeepSeek is not the only factor.

Although DeepSeek is the main trigger for the plunge, there are other reasons amplifying the market's selling sentiment: