Who owns DeepSeek? How Chinese AI 'Sputnik' disrupted US and global stocks

Wall Street bled on Monday evening, with AI chipmaker Nvidia crashing in double digits and plummeting by a sixth of its value. Chinese startup DeepSeek's low-cost AI chatbot was blamed for the bloodbath, with the bears taking over global markets soon after.

Given the AI model is created at a fraction of the cost incurred by the American AI models, the Nasdaq Composite index, which is heavy on US IT stocks, plunged 3.07 per cent on Monday. US semiconductor behemoth Broadcom plunged 17.4 per cent and Nvidia 16.9 percent while Alphabet and Microsoft fell 4 per cent and 2.14 per cent. However, the rout was not limited to the US. Dutch semiconductor supplier ASML and Japan's SoftBank, which has invested heavily in AI and semiconductors, also bore the brunt. German AI hardware maker Siemens Energy also lost a fifth of its value.

Who owns DeepSeek?

Hangzhou-based DeepSeek is owned and backed by Chinese hedge fund High-Flyer. The hedge fund's co-founder Liang Wenfeng set up the AI firm in 2023. Wenfeng serves as the CEO of DeepSeek.

Following the market rout, Mark Andreessen of Silicon Valley venture capital firm Andreessen Horowitz was quick to dub the Chinese AI model as the Sputnik moment in artificial intelligence industry. He was referring to Soviet Union's Sputnik launch during the cold war to counter US space domination.

More than technological upper hand, experts say the cost efficiency of DeepSeek gives the US rivals a run for their money. The app launched in the US on January 10 surpassed ChatGPT on iPhone downloads.

The latest development comes amid US restrictions on sale of AI chip technology to China. This prompted AI developers in China to coordinate on technology, helping them create models requring less computing power.

The latest model, DeepSeek-R1, is allegedly able to perform similar to OpenAI's advanced models used for coding and maths.