China’s AI startup DeepSeek has announced the development of a large-scale AI model with a budget of approximately $6 million (about 8 billion KRW), causing turmoil in global stock markets. Since AI model development has typically required billions of dollars, the market is closely watching whether DeepSeek’s low-cost, high-performance model could reshape the cost structure of the AI industry.
DeepSeek has drawn even greater attention for building a competitive AI model despite the restrictive environment imposed by U.S. semiconductor export regulations. The U.S. government has restricted the export of NVIDIA’s AI chip H100 to prevent Chinese companies from obtaining cutting-edge AI semiconductors. In response, NVIDIA released the lower-spec H800 chip for the Chinese market. DeepSeek managed to develop an AI model with performance comparable to ChatGPT using only 2,048 H800 chips.
Following this announcement, global investors assessed that a new standard for AI technology competitiveness might emerge. Notably, NVIDIA’s stock price plunged by 16.97% in a single day, marking its steepest decline since the early days of the COVID-19 pandemic in March 2020. Other big tech firms, including Microsoft (MS) and Google (Alphabet), also saw stock declines due to concerns over increasing investment burdens in AI infrastructure.
The impact extended to South Korea’s stock market, causing semiconductor-related stocks to drop sharply. SK Hynix fell 11.86% intraday to 194,000 KRW, while post-processing semiconductor equipment firms such as Hanmi Semiconductor, TechWing, and DI also saw significant declines.
On the other hand, AI software-related firms experienced an uptrend, as DeepSeek’s technological advancements were expected to have a positive impact. Naver and Kakao rose by 5.15% and 5.31%, respectively, while Douzone Bizon gained 4.70%.
Additionally, GRT, reportedly associated with DeepSeek’s AI server operations, hit the daily limit, surging 29.92%. Experts believe DeepSeek’s announcement could disrupt the existing cost structure of the AI industry, leading to increased volatility in AI-related stocks for the foreseeable future.
Meanwhile, Silicon Valley’s OpenAI is pursuing the largest funding round in its history to counter DeepSeek’s rise.
As competition in the AI industry evolves, investors must now focus not only on technological capabilities but also on cost efficiency and changes in revenue structures.
