NVIDIA just lost $500B+ in market cap. Tech stocks are in freefall....
Ole Lehmann@itsolelehmann
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Jan 27, 2025
~3 min read
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NVIDIA just lost $500B+ in market cap.
Tech stocks are in freefall.
VCs are in panic mode.
All because a $6M Chinese AI startup just achieved what Silicon Valley said was impossible.
Here's why DeepSeek's new model changes everything we thought we knew about AI 🧵:
Tech stocks are in freefall.
VCs are in panic mode.
All because a $6M Chinese AI startup just achieved what Silicon Valley said was impossible.
Here's why DeepSeek's new model changes everything we thought we knew about AI 🧵:
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Let's run the numbers:
OpenAI spent $600M+ on o1
Google? Billions on Gemini
DeepSeek: $6M total
China's DeepSeek is #1 in the US App Store.
And it's now the world's most powerful reasoning AI model.
Silicon Valley's AI moat just evaporated overnight.
x.com/kimmonismus/st…
OpenAI spent $600M+ on o1
Google? Billions on Gemini
DeepSeek: $6M total
China's DeepSeek is #1 in the US App Store.
And it's now the world's most powerful reasoning AI model.
Silicon Valley's AI moat just evaporated overnight.
x.com/kimmonismus/st…
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But it gets worse.
DeepSeek isn't just cheaper to build...
It's also cheaper to run.
• OpenAI charges $100+ per million tokens
• DeepSeek costs less than $4 for the same usage
Imagine telling Nvidia investors their AI chips won't not be needed at this scale anymore...
DeepSeek isn't just cheaper to build...
It's also cheaper to run.
• OpenAI charges $100+ per million tokens
• DeepSeek costs less than $4 for the same usage
Imagine telling Nvidia investors their AI chips won't not be needed at this scale anymore...
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Now you understand why today:
• Nvidia stock has nuked 17% ($500+ BILLION wiped out!)
• Tech stocks are in freefall
• Venture capital in panic mode
But the real story isn't just about money.
It's about what this means for America's tech dominance...
• Nvidia stock has nuked 17% ($500+ BILLION wiped out!)
• Tech stocks are in freefall
• Venture capital in panic mode
But the real story isn't just about money.
It's about what this means for America's tech dominance...
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DeepSeek just built an AI model that matches OpenAI's performance... for 1/1000th of the cost.
Let that sink in.
While US companies have invested 100s of billions into AI, a small team in China did it for $6 million.
This isn't just disruption, it's technological humiliation.
Let that sink in.
While US companies have invested 100s of billions into AI, a small team in China did it for $6 million.
This isn't just disruption, it's technological humiliation.
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Marc Andreessen [ @pmarca ] calls this "AI's Sputnik moment" - and he's right.
The parallels to Sputnik and the Space Race are crazy:
• America thought it was unbeatable
• A rival power leaps ahead
• Markets panic
• National security fears explode
The parallels to Sputnik and the Space Race are crazy:
• America thought it was unbeatable
• A rival power leaps ahead
• Markets panic
• National security fears explode
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But here's what's really keeping Silicon Valley awake at night:
DeepSeek's model isn't just cheap. It's open source.
Imagine if the Soviets had given away rocket blueprints in 1957.
That's essentially what's happening here.
Even more frightening for U.S. tech giants?
DeepSeek's model isn't just cheap. It's open source.
Imagine if the Soviets had given away rocket blueprints in 1957.
That's essentially what's happening here.
Even more frightening for U.S. tech giants?
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DeepSeek R1 is:
• 27x cheaper than OpenAI
• Matches or beats o1 on key tests
• Anyone can use and modify it
• No billion-dollar data centers needed
(imo it's also way better named the US models lol)
Just like Sputnik showed America wasn't invincible in space...
• 27x cheaper than OpenAI
• Matches or beats o1 on key tests
• Anyone can use and modify it
• No billion-dollar data centers needed
(imo it's also way better named the US models lol)
Just like Sputnik showed America wasn't invincible in space...
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DeepSeek shows US tech giants aren't invincible in AI.
But here's what makes this moment even more critical:
This isn't just about one AI model.
DeepSeek is exposing deeper cracks in America's tech foundation:
But here's what makes this moment even more critical:
This isn't just about one AI model.
DeepSeek is exposing deeper cracks in America's tech foundation:
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• China already leads in AI research publications
• Controls 90% of rare earth materials for chips
• Produces 3x more STEM graduates annually
• Dominates high-tech manufacturing
Silicon Valley's nightmare isn't just about DeepSeek. It's about realizing they might have already lost the lead.
• Controls 90% of rare earth materials for chips
• Produces 3x more STEM graduates annually
• Dominates high-tech manufacturing
Silicon Valley's nightmare isn't just about DeepSeek. It's about realizing they might have already lost the lead.
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The impact is already spreading:
• AI companies reassessing business models
• Cloud giants realizing their AI margins might vanish
• VC firms rewriting investment theses
• Pentagon officials demanding briefings
Remember, Sputnik's launch led to America reacting with:
• AI companies reassessing business models
• Cloud giants realizing their AI margins might vanish
• VC firms rewriting investment theses
• Pentagon officials demanding briefings
Remember, Sputnik's launch led to America reacting with:
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• NASA's creation
• Massive education reforms
• The space race
• Technology revolution
Will DeepSeek trigger a similar response in the US?
History suggests yes.
• Massive education reforms
• The space race
• Technology revolution
Will DeepSeek trigger a similar response in the US?
History suggests yes.
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Trump's $500B Project Stargate announcement shows America recognizes the threat.
But can massive spending solve this?
Or does the US need to fundamentally rethink how to compete with China?
China doesn't need to match U.S. spending.
But can massive spending solve this?
Or does the US need to fundamentally rethink how to compete with China?
China doesn't need to match U.S. spending.
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They just proved they can outthink it.
The last time America faced a "Sputnik moment," it transformed society.
Now we're watching another one unfold in real time.
But this isn't about satellites anymore — it's about who controls humanity's most powerful technology.
The last time America faced a "Sputnik moment," it transformed society.
Now we're watching another one unfold in real time.
But this isn't about satellites anymore — it's about who controls humanity's most powerful technology.
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America turned Sputnik into triumph.
But first, it had to admit it was behind.
I'm VERY curious to see how American tech responds to this moment 🍿
But first, it had to admit it was behind.
I'm VERY curious to see how American tech responds to this moment 🍿
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