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Chinese AI App DeepSeek Sparks Market Turmoil, $500bn Wiped from Nvidia and US Tech Giants

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Chinese AI App DeepSeek Sparks Market Turmoil, $500bn Wiped from Nvidia and US Tech Giants

The emergence of Chinese AI app DeepSeek has triggered shockwaves across the US tech industry, leading to a significant drop in stock prices for major companies. AI chipmaker Nvidia saw its value plummet by 16%, losing $500 billion in market capitalization. Rival Broadcom also suffered a sharp decline, with shares falling 17.8%, while other tech giants like Microsoft and Meta experienced notable losses.

DeepSeek has quickly risen to become the most downloaded free app in the United States, overtaking popular rivals like ChatGPT. Its reported development cost of just $6 million has sent ripples through the industry, challenging the traditional notion that groundbreaking AI technology requires multibillion-dollar investments.

In stark contrast, companies like Microsoft and Meta have committed vast sums to AI development, with investments of $80 billion and $60–65 billion, respectively. DeepSeek’s meteoric rise suggests that a lower-cost, open-source approach may disrupt existing business models and redefine what is possible in AI.

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The sudden market turmoil underscores concerns about America’s dominance in artificial intelligence. Investors are now questioning whether US tech companies can maintain their competitive edge against cheaper, innovative alternatives like DeepSeek.

Nvidia, a key player in AI chip manufacturing, experienced the most significant blow, as the app’s success has called into question the scalability and profitability of existing AI strategies reliant on expensive infrastructure.

DeepSeek’s rise highlights the potential for more cost-effective, innovative solutions in AI development. While its reported $6 million development budget remains disputed by some industry experts, it has already shifted perceptions of what achieving AI breakthroughs might cost.

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This development could pave the way for smaller companies and governments to explore AI without the need for massive financial resources. In the UK, where the government is banking on AI to drive economic growth and reduce public service costs, such advancements could serve as inspiration for future projects.

Despite its success, DeepSeek’s rapid rise also raises questions about its long-term sustainability, data privacy, and the technology underpinning its platform. As researchers and analysts delve deeper into its model, the app’s low-cost development claims may face scrutiny.

The DeepSeek phenomenon has upended the AI market, challenging entrenched economic assumptions and sparking uncertainty for US tech giants.

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Former Prime Minister Keir Starmer Resigns as MP

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Former UK Prime Minister Sir Keir Starmer has announced that he will step down as an MP, ending his 11-year tenure representing the London constituency of Holborn and St Pancras.

The decision will trigger a by-election in the Labour stronghold, which Sir Keir has represented since 2015.

Sir Keir, who left Downing Street in July, had previously indicated that he intended to remain an MP until the next general election, which is not currently due until 2029.

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However, in a surprise announcement, he said he was resigning from Parliament to focus on international affairs and his long-standing work to combat violence against women and girls.

Speaking to the Camden New Journal, Sir Keir described representing the constituency as a “huge honour and privilege” and said he was now ready to “pass the baton to a successor”.

He said the decision was the “right time” for him to leave Parliament after more than a decade as its representative.

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Sir Keir said his future work would focus on international affairs, including defence, security, trade and technology, as well as continuing his efforts to tackle violence against women and girls.

He said the issue had been important to him long before he became an MP and that he was keen to continue the work after leaving Parliament.

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Progressive Abdul El-Sayed wins Democratic Senate primary in Michigan

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Abdul El-Sayed has won Michigan’s Democratic primary for the US Senate, setting up a November election contest against Republican Mike Rogers.

The former public health official narrowly defeated moderate Democratic congresswoman Haley Stevens in a closely fought race that highlighted divisions within the Democratic Party over its political direction.

With more than 1.5 million ballots counted, El-Sayed led Stevens by fewer than 15,000 votes, a margin of just under one percentage point.

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Addressing supporters after his projected victory, El-Sayed quoted boxer Muhammad Ali, saying: “In the words of Muhammad Ali, ‘We shook up the world.’”

He added that his campaign had been driven by support for policies including reducing the influence of money in politics and expanding healthcare access through Medicare for All.

Stevens conceded the race and endorsed El-Sayed, describing him as “a doctor, a community health official, a Rhodes Scholar, and a dedicated Michigander.”

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“I am proud to offer my support as he takes on Mike Rogers in the general election,” she said.

The November midterm election will determine who succeeds Michigan’s outgoing senator and could influence the balance of power in the US Senate during the final two years of President Donald Trump’s term.

Trump welcomed the primary result in a post on Truth Social, calling it “great news for the Republican Party” and criticising Democratic policies.

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During the campaign, El-Sayed, who was endorsed by Bernie Sanders and Alexandria Ocasio-Cortez, advocated progressive policies including universal healthcare and abolishing US Immigration and Customs Enforcement (ICE).

Stevens campaigned as a centrist candidate, focusing on protecting Michigan’s manufacturing sector and appealing to moderate voters ahead of the general election.

If elected in November, El-Sayed would become the first Muslim to serve in the US Senate.

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Keir Starmer Announces Resignation as Labour Leader and Prime Minister

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Keir Starmer Announces Resignation as Labour Leader and Prime Minister

Keir Starmer has announced that he will resign as leader of the Labour Party and step down as prime minister, bringing an end to his time in office.

In an emotional statement delivered outside Number 10 Downing Street, Starmer reflected on the state of Labour when he took over the party’s leadership, saying he inherited an organisation that was “politically, financially and morally bankrupt”.

He said he had repeatedly been told that Labour was “finished” but argued that his leadership had proved critics wrong.

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Starmer pointed to what he described as key achievements during his tenure, including tackling anti-Semitism within the party.

“I changed the Labour Party by ripping out the poison of anti-Semitism,” he said.

He also highlighted efforts to restore public confidence in Labour on economic management, defence and national security.

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Leaving Number 10 alongside his wife to cheers and applause from supporters and staff, Starmer described becoming prime minister as the proudest moment of his life.

“Walking up Downing Street two years ago was the proudest moment of my life,” he said.

The outgoing prime minister added that he entered politics to improve people’s lives and reflected on Labour’s journey back to power in the July 2024 general election.

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Addressing the growing debate within Labour over its future leadership, Starmer said the central question facing the party was whether he remained the right person to lead it into the next general election.

He acknowledged that party members and colleagues had reached their conclusion.

“I have heard the answer of my party to that question and I accept that answer with good grace,” he said.

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Starmer insisted that every major decision he had taken in office had been guided by what he believed was best for the country.

“Every decision I have taken has been about putting the country I love first,” he said.

Concluding his statement, Starmer confirmed his departure from the party leadership.

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“I will resign as leader of the Labour Party,” he announced.

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