The United States and China are two undisputed global superpowers, not just based on their economies and militaries but also in the artificial intelligence (AI) arms race. China-based DeepSeek caused shockwaves and was a game changer in AI. It revealed how its AI could do just as much or even more at a significantly smaller investment than its counterparts in the United States.
AI stocks were sent tumbling in the computer and technology sector, leading to over one trillion dollars of market capitalization being shaved off the markets on January 27, 2025. The fear was that this revelation could cause AI infrastructure spending to drastically slow down as companies realized they had been overspending.
