DeepSeek and a technological upheaval

Until this week, DeepSeek was a little-known company. Then the Chinese startup sent the stock market and tech giants like Meta and Nvidia into a tailspin: On Monday, U.S. stocks plunged more than 2 percent, and tech stocks in Europe and Japan also suffered.

The panic was because DeepSeek made remarkable advances in artificial intelligence: It matched the capabilities of some chatbots with just a fraction of the chips (or semiconductors) used by major tech companies, calling into question one of the main tenets driving competition among AI giants: that you have to spend a lot to be the best, as explained in the latest installment of The Shift column.

Meanwhile, Cade Metz, a reporter who covers artificial intelligence for the Times from San Francisco, summed it up this way:

DeepSeek sent shockwaves around the world on Monday because one of its achievements — creating a highly powerful AI model on far less money than many AI experts thought possible — raised questions, including whether U.S. companies were even competitive in AI.

In this guide, Cade answers 10 of the top questions about this tech and stock market shock.

The announcement was not without controversy, by the way: OpenAI said it was investigating whether DeepSeek had used its data to gain an advantage. A spokeswoman said: “We take aggressive and proactive countermeasures to protect our technology and will continue to work closely with the US government to protect the most capable models developed here.”

OpenAI itself faces numerous lawsuits accusing it of using copyrighted data to train its AI systems, including a suit filed by The New York Times that also names Microsoft.