Chinese startup DeepSeek has experienced outages on its website, after its AI tool became the top-rated free app on the US Apple Store. According to information on the company’s page, DeepSeek has resolved issues with its API and users’ inability to log in to the site.
These outages are the longest the company has experienced in about 90 days, and coincide with a significant surge in its popularity. This crisis is a challenge for the company.
Huge financial losses for major companies due to the impact of DeepSeek
The sudden popularity of DeepSeek has affected the performance of some major companies in the US financial markets, resulting in huge declines in stock markets. According to data from January 27, 2025, these outages have caused huge financial losses for major companies. Here is a list of companies that were severely affected by these effects:
1: Nvidia:
Loss: $600 billion
Reason: 17% drop in the company’s stock due to the threat of DeepSeek as a major competitor in the field of artificial intelligence.
2: Microsoft:
Loss: Estimated loss based on a 4% drop in market value (about $130 billion, according to market estimates at the time).
3: Amazon:
Loss: Estimated loss based on a 4% drop in market value (about $150 billion, according to market estimates at the time).
4: Alphabet:
Loss: Estimated loss based on a 4% drop in market value (about $120 billion, according to market estimates at the time).
5: Tesla:
Loss: Estimated loss based on a 4% drop in market cap (about $60 billion, according to market estimates at the time).
6: Meta:
Loss: Estimated loss based on a 4% drop in market cap (about $85 billion, according to market estimates at the time).
7: NASDAQ:
Loss: 3.5% of the index’s total market cap (about $1 trillion).
DeepSeek cyberattack. What’s the story?
DeepSeek, a Chinese AI startup that has recently gained wide popularity, was hit by a major cyber-attack that took its website offline. The attack came at a sensitive time as the company’s smart application had topped the Apple Store in the United States to become the most downloaded, reflecting its huge increase in popularity.
Impact of the attack and resolving technical issues
Following the attack, DeepSeek announced that it had to temporarily reduce the number of users accessing its platform to resolve technical issues caused by the attack. In a later announcement, the company confirmed that it had been able to resolve issues related to its application programming interface (API), allowing users to log back into the site. Although this was the longest outage the company had faced in about 90 days, the DeepSeek team worked to quickly resolve the matter.
DeepSeek-V3 model leads the market
On the other hand, DeepSeek launched its new model, DeepSeek-V3, which quickly became the leader in open source models, outperforming many of its closed-source competitors. Since its launch on January 10, 2025, this model has become one of most advanced models in the AI market. The developers claim that the cost of developing this model remained unusually low compared to other models because they used NVIDIA H800 chips in the development process, which enhanced its efficiency.
Sam Altman’s Comment on the DeepSeek R1 Model
On the other hand, Sam Altman, CEO of OpenAI, commented on the DeepSeek R1 model, noting that it is an amazing model. However, Altman stressed that computing power is the decisive factor for achieving success in developing such models. He also added that OpenAI will continue to enhance its computing power in order to maintain its leadership in field of artificial intelligence.
DeepSeek’s Future Challenges and Their Impact
DeepSeek is clearly facing significant challenges at the moment. While the company is experiencing unprecedented success in the field of artificial intelligence, the pressure it faces from website outages could affect its reputation and its ability to maintain its position in the market. If these issues continue to affect workflow, users may find it difficult to benefit from the tool, putting the company to a critical test.
Despite these technical issues, DeepSeek still has significant growth and innovation opportunities in the field of artificial intelligence. However, it must improve the stability of its website and avoid frequent outages if it wants to maintain the success it has achieved so far.
Market Response and Future Prospects
When looking at market response, it can be seen that DeepSeek’s impact on major companies could have far-reaching consequences. Initially, stocks of giants such as Nvidia, Microsoft, and Amazon saw a significant decline after this startup threatened to dominate the artificial intelligence sector. This decline in market value reflects the growing concern among investors about the ability of these companies to maintain their leadership in light of new competition imposed by DeepSeek.
Market expectations indicate that the coming period will witness major shifts in the dynamics of the industry. The rapid progress in artificial intelligence technologies will likely pressure large companies to invest in research and development to keep up with innovations from emerging companies like DeepSeek. This shift may bring significant changes to the market’s power dynamics, as new players could emerge to compete with traditional companies that were once considered pioneers in the field.
On the other hand, DeepSeek is expected to continue its development in the future, especially if it is able to overcome technical challenges it currently faces.
The market is on the cusp of a new phase of major transformations
But despite the optimistic expectations for DeepSeek, there remain doubts about its ability to maintain its stability in a market full of technical and regulatory challenges. If it can overcome these obstacles, it could become a major player in the near future.
Overall, it can be said that the market is on the cusp of a new phase of major transformations. Large companies may find themselves forced to reevaluate their strategies to respond faster and better to future developments in the field of artificial intelligence. Estimates of these losses rely on relative declines in the market value of these companies and lack complete accuracy. The valuation is based on the loss ratios mentioned, and these numbers may change with market developments.