Chinese Startup's Cheaper AI Model Creates Ripples Causing US Stock Market to Drop by $1 Trillion in Single Day

China's DeepSeek AI has recently made headlines by shaking up the U.S. stock market. Here's a brief overview of what happened:

DeepSeek AI, a Chinese artificial intelligence startup, announced a breakthrough in AI technology with its R1 model, which can rival the performance of leading U.S. AI models like OpenAI's GPT-4 but at a fraction of the cost. This announcement caused a significant drop in the stock market, particularly affecting tech giants like Nvidia, which saw a historic $589 billion loss in market value in a single day. The overall impact on the tech-heavy Nasdaq index was a drop of nearly $1 trillion in global market value.

On 10 January 2025, DeepSeek released its first free chatbot app, based on the DeepSeek-R1 model, for iOS and Android. By 27 January, DeepSeek-R1 had surpassed ChatGPT as the most-downloaded free app on the iOS App Store in the United States, causing Nvidia's share price to drop by 18%. Besides United States, the Deepseek effect could also be seen in Japan as SoftBank stock price also fell by 8% during trading hours in Tokyo.

The key factors contributing to these market reaction include:

• Cost Efficiency: DeepSeek's AI model was developed for $5.6 million, much less than the billions spent by U.S. companies on similar models.
• Technological Leap: DeepSeek's model challenges the dominance of U.S. tech firms and raises questions about the sustainability of high capital expenditures in AI development.
• Market Panic: The sudden rise of a competitive AI model from China led to investor uncertainty and a sell-off in tech stocks.

This event has sparked debates about the economic and geopolitical competition between the U.S. and China in the AI industry. It's indeed a significant development in the tech world!

Headquartered in Hangzhou, Zhejiang, DeepSeek is a Chinese AI startup founded by Liang Wenfeng in May 2023. As for investors, DeepSeek is funded by the Chinese hedge fund High-Flyer, which was co-founded by Liang Wenfeng. High-Flyer focuses on developing and using AI trading algorithms.

The 20-months old Chinese start-up has quickly gained attention with its DeepSeek-V3 and DeepSeek-R1 models, which have been praised for their efficiency and cost-effectiveness. Here are some key points about DeepSeek:

Cost-Effective Development: DeepSeek-V3 was trained using approximately 2,000 Nvidia H800 chips over 55 days, costing around $5.58 million. This is significantly less than the billions spent by other companies on similar models.

Advanced Capabilities: DeepSeek-R1 focuses on logical inference, mathematical reasoning, and real-time problem-solving, achieving performance comparable to OpenAI's o1 model.

Open Source: DeepSeek's models are available for free, making them accessible to a wider audience.

Global Impact: The launch of DeepSeek has caused a significant reaction in global markets, particularly affecting U.S. tech stocks.

DeepSeek's innovative approach to AI development has sparked discussions about the future of AI technology and its potential to democratize access to advanced AI tools.

Renault-backed Chinese EV Startup Unveils Smart Car with AI-based Health Monitoring

BeyonCa, a new China-based electric vehicle startup backed by Renault, has unveiled its to launch a smart prenium electric car that will be able to protect the drivers in the car from serious incidents like heart attack and can even monitor blood pressure.

BeyonCa announced its global debut on October 30, showcasing the BeyonCa Gran Turismo Opus 1 and has claimed itself to be the world’s first super premium EV brand.

Beyonca plans to unveil its first production car in the first quarter of next year with deliveries starting from 2024, company's top executive told Reuters.

The car currently in concept stage will have enough smart features such as sensors that can monitor a driver’s blood pressure, alarms to alert doctors employed by Beyonca of an emergency and an autonomous driving function to help park the car.

BeyonCa GT OPUS 1

The Gran Turismo Opus 1 will be supported by an Artificial Intelligence (AI) -based smart cockpit that can monitor the driver’s health status in real-time and will automatically stop the vehicle if symptoms of cardiovascular disease, stroke or driver fatigue are detected.

The car is said to be equipped with the world’s first in-cabin cloud doctor service where a doctor will appear virtually on the vehicle’s infotainment screen. The team of ‘cloud doctors’ will be supervised by chief health officer, Dr. Tim Guo, a cardiovascular specialist with over 27 years of experience.

Led by current Renault China CEO Soh Weiming, the upcoming BeyonCa cars will be fitted with sensors and cameras, which can monitor the vital signs of the driver. If unusual symptoms are detected while driving, an Artificial Intelligence (AI) assistant tries to talk to the driver. If the driver does not respond in such a situation, then the autonomous driving system takes the car to a safe place. After this, the virtul doctor in the car can check the patient through the screen of the smart cockpit.

The company is targeting the high-end premium segment, where they would compete with models such as Audi’s A8L, BMW‘s 7 Series and Mercedes’ S Class.

In an interview to Bloomberg, a company official said, "We are not making ambulances here. We are building a premium car with smart AI to help people. However, industry experts believe that the high price tag could have a negative impact on the sales of this car as other Chinese startup BYD is making more budget friendly and attractive cars."

The Gran Turismo Opus 1 is expected to be priced from 1 million Yuan (RM650k) or about ₹ 1.14 crore, according to CarNewsChina.com.

The Gran Turismo Opus 1 will be supported by an Artificial Intelligence-based smart cockpit that can monitor the driver’s health status in real-time and will automatically stop the vehicle if symptoms of cardiovascular disease, stroke or driver fatigue are detected.

Interior of GT OPUS 1

Interiors of GT OPUS 1

The car has ‘New Bian Que Diagnosis' system on-board. This system will collect data about the mood, heart rate, pulse, and breathing of people inside the car. It will enhance the self-driving system of the GT Opus 1. The name of this system is on ancient Chinese figure—Bian Que, who is considered a most important figure in the history and development of Chinese Medicine.

Besides being backed by auto major Renault, BeyonCa is also backed by Dongfeng Motor, a Chinese state-owned automobile manufacturer headquartered in Wuhan, Hubei of China.

BeyonCa is a true global company with headquarter in China, a design center in Germany and an AI development hub in Singapore, which is headed by former Volkswagen China boss and current Renault China CEO, Soh Weiming.

 

China Startup that owns Musical.ly Beats Uber to become World’s Most Valuable Startup

A Chinese internet technology company that operates several content platforms powered by machine learning and which recently had a rough interaction with Chinese government when China’s central government ordered to close its flagship popular app, Jinri Toutiao, because of its rude and sexually explicit content that are mostly jokes, is now the world's most valuable startup beating America's Uber.

Beijing, China-based ByteDance or Bytemod Pte Ltd has just raised a fresh round funding amounting US$3 billion that will value the startup at US$78-75 billion, more than Uber Technologies, which currently valued at US$72 billion, reported Bloomberg.

Bytedance is company behind popular video app Musical.ly and News Republic, a news and video aggregator . The startup is also the owner of popular apps in China including TikTok, karaoke video app, and huge Chinese news aggregator Toutiao.

With this remarkable achievement, ByteDance has done an unexpected thing no 'Business Pundit' had ever thought of, particularly because at $75 billion valuation this largely unknown startup has not just outran Uber but have also broke the dominance of its local competitor in China and internet giants Baidu, Alibaba and Tencent -- the so-called BAT big three.

Now, ByteDance founder Yiming Zhang will join league of Alibaba's Jack Ma and Baidu's Robin Li and one may expect an increased traction of ByteDance in south east Asian countries particularly in India, Singapore and Indonesia. Zhang has recently been included in a China's list of 100 entrepreneurs lauded for their “great achievements in the development of the private economy” over the past 40 years.

ByteDance has an India connection too, as in 2016 the Chinese firm had made a major investment of $25 million in DailyHunt, India’s leading local language app.

In 2017, ByteDance had acquired a US-based popular short-form video app, Flipagram. In 2017, ByteDance acquired global news app News Republic and global video community musical.ly. After it acquired music start-up musical.ly, the company combined the two platforms into a single application under the TikTok name. It also runs BuzzVideo and Vigo Video.

In global tech community, ByteDance is known for its flagship app Toutiao, which is also the startup's core product. Toutiao was started out as a news recommendation engine and gradually evolved into a platform delivering content in a variety of formats, such as texts, images, question-and-answer posts, microblogs, and videos. Toutiao offers its users personalized information feeds that are powered by machine learning algorithms. A content feed is updated based on what the machine learns about a user’s reading preferences.

ByteDance’s investors include General Atlantic, SoftBank, KKR & Co and Primavera Capital Group, according to Crunchbase, which tracks venture capital investments.

Beijing-based Bicycle Sharing Startup Ofo To Enter India Next Year

China’s bicycle rentals on-demand startup, Ofo is planning to enter the Indian market, according to an Economic Times report. The report claims that the company, which became a unicorn earlier this year might grace the Indian market with its presence by the first half of next year.

The world's first and largest station-free bike share platform and mobile app, ofo provides sustainable, affordable transportation to all.

China's bicycle rentals on-demand space has been flourishing at an unprecedented rate with the sector raking in investments worth more than $300 million this year alone. In February this year, Beijing-based Ofo, which is popularly also referred to as the Uber for Bikes, became the first player in the space to have reached the much-coveted $1 billion valuation, thus adding the title unicorn to its name.

Considering the startup has already captured its home market, it makes sense that the company now wants to expand beyond its home market.

“Ofo is currently doing extensive ground research in India, examining government policies and the permissions required where foreign businesses in the transportation sector are concerned, as well as looking into the infrastructural limitations,” the report quotes a person aware about the development.

The person also highlights that considering the fact that sharing economy already exists in India, select state government officials in the country realise that if Ofo enters the country it can significantly help in resolving the congestion issues that the South Asian country is facing. He also shares that the government can also act on building larger regional transit systems that are sustainable and are in line with smart cities plans.

Founded in 2014, Ofo’s mission is to solve the “last mile” problem of urban transportation, helping commuters and travelers get to exactly where they need to go by making bikes accessible to everyone. It is currently one of the world’s leading “station-free” bike-sharing platform operated via an online mobile app.

Since Ofo’s system doesn’t require any docking stations, it provides its users significant flexibility to find and return bikes anywhere, anytime.

In addition to India, the startup backed by Didi Chuxing is also contemplating an expansion into Indonesia by next year.

This development was first reported in Economic Times.

Beijing-based Bicycle Sharing Startup Ofo To Enter India Next Year

China’s bicycle rentals on-demand startup, Ofo is planning to enter the Indian market, according to an Economic Times report. The report claims that the company, which became a unicorn earlier this year might grace the Indian market with its presence by the first half of next year.

The world's first and largest station-free bike share platform and mobile app, ofo provides sustainable, affordable transportation to all.

China's bicycle rentals on-demand space has been flourishing at an unprecedented rate with the sector raking in investments worth more than $300 million this year alone. In February this year, Beijing-based Ofo, which is popularly also referred to as the Uber for Bikes, became the first player in the space to have reached the much-coveted $1 billion valuation, thus adding the title unicorn to its name.

Considering the startup has already captured its home market, it makes sense that the company now wants to expand beyond its home market.

“Ofo is currently doing extensive ground research in India, examining government policies and the permissions required where foreign businesses in the transportation sector are concerned, as well as looking into the infrastructural limitations,” the report quotes a person aware about the development.

The person also highlights that considering the fact that sharing economy already exists in India, select state government officials in the country realise that if Ofo enters the country it can significantly help in resolving the congestion issues that the South Asian country is facing. He also shares that the government can also act on building larger regional transit systems that are sustainable and are in line with smart cities plans.

Founded in 2014, Ofo’s mission is to solve the “last mile” problem of urban transportation, helping commuters and travelers get to exactly where they need to go by making bikes accessible to everyone. It is currently one of the world’s leading “station-free” bike-sharing platform operated via an online mobile app.

Since Ofo’s system doesn’t require any docking stations, it provides its users significant flexibility to find and return bikes anywhere, anytime.

In addition to India, the startup backed by Didi Chuxing is also contemplating an expansion into Indonesia by next year.

This development was first reported in Economic Times.

China invents a bendable smartphone that wraps around your wrist

What if you could wear your smartphone around your wrist instead of carrying it around in your hand 24x7 and fearing now and then that you might end up losing your priced possession? Sounds dreamy, right? Well, a Chinese startup seems to have made this dream a reality.

Moxi Group, a startup based out of China, seems to have cracked the code and manufactured a smartphone that can bend all the way around your wrist. Yes, you read it right. A Smartphone around your wrist!

Featuring an attractive flexible touchscreen, the phone still functions when the device is looped in and worn like a watch or a bracelet by the user. It also works when it is stretched out flat, like any other regular smartphone.

The bendy screen of the device makes use of graphene, which is known for being the thinnest material in the world. Along with being the thinnest, it is light, flexible, transparent and strong at the same time.

According to experts, if Moxi is able to pull of the bendable phone, then it might be at the verge of a great innovation.

But people who are getting all excited to land their hands on this innovative device, here's something you should know. The company is initially planning to launch the device only in black-and-white displays. Although this might be a deal-breaker for many, but don't lose hope. Apparently, the company is working really hard to make the color version available by 2018.

Headquartered in Chongqing, China, Moxi is known in the industry for having great precision in using graphene. In fact, the company's name, which is pronounced as "mou-she" -- means "graphene" in short in Chinese.

The company is expected to release its black-and-white versions at 5,000 yuan ($760) in China. Currently, the cheapest version of the famous iPhone 6S is selling for 5,288 yuan (US$806) in China.

In addition to Moxi, various tech giants like Apple, Samsung and LG have been working towards developing flexible touchscreens. It was only last year that Apple had received a patent for a "flexible electronic device".

According to industry experts, the biggest challenge right now in front of these companies is to figure out if it is commercially viable to manufacture the product for the mass market.

Wearable technology users are currently looking forward to having a lot more functions and greater computing power in their devices, and Moxi Group with its bendable device might just be able to give them that.