DeepSeek's new AI model has sparked concerns about Nvidia's dominance in the AI hardware market, causing a drop in the chipmaker's stock and raising questions about the future of high-performance AI chips.

DeepSeek, a Hangzhou-based startup founded in 2023, shot to the top of Apple’s App Store free app chart after releasing a new open-source AI model it says rivals OpenAI's work. Its website was hit by outages amid a spike in interest.

The Chinese artificial intelligence firm DeepSeek has rattled markets with claims that its latest AI model, R1, performs on a par with those of OpenAI, despite using less advanced computer chips and consuming less energy.

China’s DeepSeek says it trained an AI model for less than $6 million. This is as big U.S. tech companies have poured billions of dollars into AI chips and systems for their projects.

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

A new Chinese AI model threatens to diminish the need for Nvidia’s most-expensive chips, but some say the concerns are overblown.