Sam Altman breaks his silence on new ChatGPT rival after Chinese begin up DeepSeek wiped $1trillion off shares kicking off world AI gold rush

OpenAI CEO Sam Altman has broken his silence on the new rival to ChatGPT, hailing the Chinese competitor as ‘impressive’ while also touting his product’s alleged superiority.

Altman praised Chinese rival DeepSeek’s latest AI model on Monday after the chatbot’s debut destabilized the AI market and caused the US stock market to hemorrhage $1trillion.

He said it was ‘invigorating to have a new competitor’ but emphasized that OpenAI believes greater computing power was key to their own success.

DeepSeek-R1 launched last week and is 20 to 50 times more affordable to use than OpenAI’s o1 model, depending on the task, according to a post on DeepSeek’s official WeChat account.

Fears of upheaval in the AI gold rush rocked Wall Street on Monday following the emergence of DeepSeek, sparking panic that the West could fall behind in the AI arms race.

DeepSeek’s emergence has raised doubts about the reasoning behind some US tech companies’ decision to pledge billions of dollars in AI investment, and shares of several big tech players, including Nvidia, have been hit.

President Donald Trump has hailed it as a ‘wake-up call’ for Silicon Valley and argued that US tech giants ‘need to be laser-focused on competing to win.’

It comes as DeepSake was hit by ‘large-scale malicious attacks’ and said Monday that it would temporarily limit user registrations, CNBC reported.

DeepSeek, a low-cost Chinese artificial intelligence model, grabbed global attention last month when it stated in a paper that training its DeepSeek-V3 model required less than $6million in computing power using the lower-capability Nvidia H800 chips. 

‘DeepSeek’s r1 is an impressive model, particularly around what they’re able to deliver for the price,’ Altman said on X.

‘But mostly we are excited to continue to execute on our research roadmap and believe more compute is more important now than ever before to succeed at our mission,’ Altman added.

Wall Street indexes sank 3 percent on Monday morning after a Chinese artificial intelligence startup triggered fears America’s top tech stocks are overvalued. 

Investors dumped around $1trillion of technology stocks in premarket trading sending the S&P 500 1.7 per cent lower as markets opened. The tech-heavy Nasdaq was hit harder, tumbling more than 3 percent on Monday morning. 

The panic has been driven by Chinese artificial intelligence startup DeepSeek which demonstrated a chatbot that it says rivals the top versions from OpenAI and Google but for a fraction of the cost. 

AL chipmaker Nvidia, which has benefitted from the AI frenzy over the last eighteen months, rose 4.8 per cent in premarket trading Tuesday – a day after $593 billion was wiped off its market value in the biggest single-session loss for any company.

Other AI-linked stocks also regained some ground, with Oracle and Broadcom rising 3.5 per cent and 4 per cent, respectively.

On Monday, the S&P 500 dropped 1.5 per cent to 6,012.28, dragged down in large part by a 16.9 per cent fall for Nvidia.  

As of early Tuesday morning, Dow E-minis were up 25 points, or 0.06 per cent, S&P 500 E-minis were up 19.5 points, or 0.32 per cent, and Nasdaq 100 E-minis were up 125.75 points, or 0.59 per cent.

Company earnings are likely to take center stage this week.

Other Big Tech stocks took heavy losses on Monday, pulling the Nasdaq composite down 3.1 per cent to 19,341.83 for its worst loss in more than a month.

Another US chipmaker Broadcom also lost around 12 per cent while software giant Oracle lost 8 percent in early trading. 

Microsoft slid 3.5 per cent and Amazon was down 0.24 per cent in the first hour of trading. Google parent company Alphabet lost about 3.5 per cent and Facebook parent Meta shed 2.5 per cent. 

The damage was focused on AI-related stocks, while the rest of the market held up much better. The Dow Jones Industrial Average rose 0.7 per cent to 44,713.58, and the majority of US stocks climbed. 

But anyone holding an S&P 500 index fund, which are found in many 401(k) accounts, felt the pain because of how influential those tech giants have become on indexes.

The shock to financial markets came from China, where DeepSeek released its free AI Assistant last week – which it says uses less Nvidia chips at a fraction of the cost of current models on the market. 

DeepSeek overtook its rival ChatGPT to become the most-downloaded free application available on the Apple Store in the US on Monday, and analysts said such a feat was particularly impressive given how the US government has restricted Chinese access to top AI chips.

DeepSeek’s advances have raised doubts about whether the US will retain its lead in the global race of advancing AI technology. 

But it’s unclear, however, how much DeepSeek’s announcement will ultimately shake the economy that’s built around the AI industry, from the chip makers making semiconductors to the utilities hoping to electrify vast data centers gobbling up computing power.

‘It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used as there will be many skeptics around this issue given the information is coming from China,’ according to Dan Ives, an analyst with Wedbush Securities.

DeepSeek’s disruption nevertheless rocked AI-related stocks worldwide.

It’s a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring in would remake the global economy and deliver gargantuan profits along the way. Such stellar performances also raised criticism that their stock prices had gone too far, too fast.

Before Monday’s drop – which was its worst since the 2020 COVID crash – Nvidia’s stock had soared from less than $20 to more than $140 in less than two years, for example.

A small group of seven such companies has become so dominant that they alone accounted for more than half the S&P 500’s total return last year, according to S&P Dow Jones Indices. They include Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla.

Their immense sizes give them huge sway over the S&P 500 and other indexes that give more weight to bigger companies.

Markets are also awaiting earnings reports later this week from Apple, Meta Platforms, Microsoft and Tesla.

The global tech stock meltdown Monday also caused some of the world’s richest men to suffered a multi-billion-dollar hit to their wealth.

One of the biggest losers was Nvidia boss Jensen Huang after shares in the computer chips maker, a poster child for the AI revolution, suffered the biggest one-day drop in value of any company in history.

Huang, 61, saw more than $22.4billion wiped off his fortune as the value of his 3.8 per cent stake tumbled by close to 18 per cent.

Meanwhile, Amazon founder Jeff Bezos, the world’s second-richest man, saw his wealth shrink by nearly $2.5billion after the online shopping site’s stock took a dip.

Others caught up included Larry Ellison, the co-founder of US software giant Oracle, who saw $20.5billion knocked off his net worth, and former Microsoft boss Steve Ballmer, who lost around $5.6billion through his 4 per cent stake in the tech firm.