Apple closes trading amid tech giant decline due to China’s DeepSeek
January 28, 2025
The U.S. stock market experienced a major downturn following the presentation of a new artificial intelligence model by the Chinese company DeepSeek. The R-1 model, capable of competing with ChatGPT, sparked investor concerns. Despite the overall decline, Apple, Meta, and Amazon managed to hold their positions.
Market reaction
According to reports, on January 27, shares of tech giants plummeted. Nvidia lost 17% ($600 billion) in a single day — the largest drop in U.S. history. Alphabet fell by 4%, while Microsoft and Tesla declined by 2.14% and 2.32%, respectively.
Amid the market crash, three companies from the "Magnificent Seven" maintained growth. Apple gained 3.18%, Meta rose by 1.91%, and Amazon increased by 0.24%. The market downturn also affected BTC, with its price dropping by 3.6% to $98,930 before partially recovering to $101,500.
What do we know about DeepSeek R-1?
The primary reason for the crash was China’s AI model, DeepSeek R-1. It solves math, programming, and language analysis tasks at the level of OpenAI models but with open-source code. The development cost only $6 million compared to the $500 billion invested in U.S. AI infrastructure.
Expert opinions
The co-founder of Andreessen Horowitz called the launch of DeepSeek R-1 an "AI Sputnik moment," likening it to the start of the space race. However, other analysts question the reported development costs. On January 27, DeepSeek temporarily restricted registration due to large-scale cyberattacks on its software.