Chinese artificial intelligence (AI) startup DeepSeek has emerged as the latest competitor in the AI industry. The startup claims to offer a more cost-effective alternative to established chatbots from Silicon Valley’s tech giants. Director of Cornell University’s Tech Policy Institute, Sarah Kreps, joins Catalysts to share her thoughts on this new technology. Kreps contextualizes DeepSeek’s emergence against recent major AI announcements, including the Trump administration’s $500 billion Stargate AI initiative and Meta Platforms’s (META) $65 billion AI commitment. "It was so interesting to follow that, at a 5% or a fraction of what these Big Tech companies are spending, it looks like this small Chinese startup is able to perform in many of the same ways as these American pioneers," she tells Yahoo Finance. According to Kreps, DeepSeek places "enormous pressure" on US AI companies to showcase tangible value from their investments. She expects "ripple effects," as this development will challenge companies to "raise the bar" for AI technology. Looking ahead, Kreps predicts "a bifurcation within the market," noting that "not every company can afford OpenAI’s services; they might prefer these alternatives that are a fraction of the price." To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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