U.S. Stocks Attempt to Recover Following Deepseek Shock

U.S. stocks began to regain footing on Tuesday following the shock caused by China’s DeepSeek, which announced an AI application that rivals the expensive applications developed by European and American companies, but at a much lower cost.

The Dow Jones Industrial Average rose to 44,747 points, adding about 0.2% or 51 points. The S&P 500 also rose to 6,038, adding about 27 points or 0.5%. The tech-heavy Nasdaq Composite rose to 19,458 points, gaining about 200 points or 1.00%.

Last Monday, fears emerged of the beginning of a fierce competition phase between Western companies (in Silicon Valley in the United States and the Eurozone) on the one hand and China on the other in the field of artificial intelligence.

These fears came as a result of a small Chinese company, founded a short time ago, launching an “AI assistant” (Chatbot) application that rivals the capabilities of applications produced by companies such as OpenAI and Meta Platforms, but at a much lower cost than Western applications such as ChatGPT.

DeepSeek has stunned investors with its extremely low cost of developing its AI application, which it said was around $6 million. In contrast, this figure was surprising, especially as it comes after major U.S. companies such as OpenAI and Google announced investments of nearly a trillion dollars in AI technologies over the coming years, according to Goldman Sachs Group forecasts.