How China sank the world's major stock markets

On Monday, January 27, the main international stock markets experienced historic declines, with a particular impact on technology stocks, accumulating losses amounting to hundreds of billions of dollars. All eyes are on China as the epicenter of this financial upheaval.

China launched DeepSeek, an artificial intelligence development that was immediately perceived as far superior to other American options such as ChatGPT. So much so that Nvidia, a leading company in the manufacture of AI chips, suffered a loss of value that is the largest in the history of the world stock market.

According to estimates by media outlets such as The New York Times, Nvidia lost around $600 billion in 24 hours. But what does Chinese AI have that makes it better than American models?

Analysts generally agree that DeepSeek is more efficient, requires less energy and consumes less chips. They also highlight its speed. And all this at lower costs.

Tripp Mickle explained it this way in The New York Times: "The launch of DeepSeek challenged the tech industry consensus that to build bigger and better AI systems, companies would have to spend billions of dollars on new data centers."

According to Reuters, China claims that DeepSeek was trained in just two months at a cost of less than six million dollars. A ridiculous figure compared to the extraordinary investments (usually between tens and more than 100 million) that the US technology industry needs to develop its AI models.

But, regardless of whether DeepSeek's superiority is proven or not, what is clear is that China is not just a factory for mass production, but rather has the scientific capacity to provide technological innovations and compete with Silicon Valley.

Donald Trump has already responded to the DeepSeek breach, saying it should be a "wake-up call" for American technology companies.

The way DeepSeek appears to be disrupting AI has investors rethinking their options: What if there isn't as much data centres or chips needed? What if it can all be done with less money and energy?

The future of technology has been shaken by China and American giants must react. Because what if China becomes the world's leading technological power? That is the question that investors are asking themselves.

The battle between China and the United States (technological, commercial and with Taiwan as a possible point of conflict) is underway. At the moment, the Chinese have sunk the stock market on Monday with their technological advance. This is a real challenge for the new president of the United States: Donald Trump.

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