With the arrival of the Chinese startup driving a mass Wall Street sell-off to start the week, DeepSeek AI is set to face a US investigation that could benefit Nvidia (NVDA). Indeed, the AI chipmaker’s stock plummeted as much as 17% Monday. Moreover, the arrival of alternative artificial intelligence saw it lose $600 billion in market cap.
The potential investigation is surrounding DeepSeek’s use of Nvidia AI chips, according to a Bloomberg report. Specifically, US officials are looking for answers as to where those semiconductors were purchased through third parties in Singapore. If this were the case, it would violate United States restrictions on the sale of chips for AI product development.
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DeepSeek AI Faces US Probe as Nvidia, OpenAI Look to Bounce Back
Amid the ongoing hype and demand, DeepSeek threw a wrench into the AI sector on Monday. It quickly surged in popularity, and with its costs only reaching $6 billion, it led many to question why the US stock market was funneling hundreds of billions into the sector.
The presence of the Chinese startup has led to plummeting share prices for some of the country’s top companies. Yet, the government is now looking to get to the bottom of what could be happening. Specifically, DeepSeek is facing a US investigation that could benefit Nvidia stocks.
However, there are a host of parties looking for insight into the operations of DeepSeek. Among them is OpenAI, as the ChatGPT developer has said that the startup may have “inappropriately” used data it had harvested.
Also Read: Nvidia (NVDA) Rebounds 8% as Tech Stocks Keep Bouncing Back
Specifically, the firm said, “We are aware of and reviewing indications that Deep Seek may have inappropriately distilled our models and will share information as we know more,” in a statement to NBC.
In the meantime, the US AI juggernaut is set to launch a new 03-mini model this week. The arrival of the program is seen as a response to the buzz around DeepSeek’s arrival. However, it is also likely just a part of the plane.
Earlier this week, OpenAI CEO Sam Altman said that the “next phase” of its Microsoft (MSFT) partnership was arriving. Moreover, he claimed it would be “better than anyone is ready for.” Alternatively, companies like Nvidia are continuing to rebound. Many believe it could be preparing for an unprecedented bull rally of its own.
