On January 7, a friend told me about a way to host an AI model on my local computer. He said it could be a cheaper alternative to running in the cloud with Google, AWS, or Azure for my software project. I told him the MVP wouldn’t be used by many people, so for now we’d host in the cloud to move faster. The company he suggested was DeepSeek, and I looked into it a bit that day. It was promising, but I decided to investigate more after my MVP is ready.

Well, on January 20, DeepSeek released a new open-source model that caused a storm in the tech community. It allegedly beats OpenAI in reasoning. This new model was reportedly created with only $6 million and significantly fewer chips for training. Other models are rumored to cost over $100 million to build and require tons of chips.

This chatter picked up significantly this weekend and caught my attention. Then, the DeepSeek app became the most downloaded app on the Apple app store this weekend. This morning the stock market took notice and sold off sharply. Bloomberg says that today, $1 trillion in value was erased for public tech companies and wealthy individuals lost over $108 billion (see here and here). NVDA alone lost roughly 17% in market value today, which means it lost over $500 billion in value in a single day (see here). That’s a record stock market drop in value of a single stock in a single day.

I haven’t played with DeepSeek yet and don’t fully understand all the implications of this open-source model performing better than OpenAI, but I’ll do some digging and have some conversations this week to learn more.