The startup DeepSeek was founded in 2023 in Hangzhou, China and released its first AI large language model later that year. Its CEO Liang Wenfeng previously co-founded one of China’s top hedge funds, High-Flyer, which focuses on AI-driven quantitative trading.

Some AI researchers hailed DeepSeek’s R1 as a breakthrough on the same level as DeepMind’s AlphaZero, a 2017 model that became superhuman at the board games Chess and Go by purely playing against itself and improving, rather than observing any human games.

Key Takeaways U.S. AI stocks sold off Monday, after an app from Chinese AI startup DeepSeek dethroned OpenAI's as the most-downloaded free app in the U.S. on Apple.DeepSeek claims its latest model’s performance is on par with that of American AI leaders like OpenAI,

DeepSeek stunned the tech world with the release of its R1 "reasoning" model, matching or exceeding OpenAI's reasoning model for a fraction of the cost.

Tech stocks plunged Monday morning, as fears mounted that Chinese artificial intelligence firm DeepSeek leapfrogged U.S. dominance in AI development.