The model was developed by the Chinese AI startup DeepSeek, which claims that R1 matches or even surpasses OpenAI’s ChatGPT o1 on multiple key benchmarks but operates at a fraction of the cost. DeepSeek’s success is even more remarkable given the constraints facing Chinese AI companies in the form of increasing US export controls on cutting-edge chips.

Tech stocks tumbled on Monday as advances by Chinese artificial intelligence start-up DeepSeek cast doubt on whether the US could sustain its leadership in AI by spending billions of dollars on chips.

DeepSeek topped the Apple AppStore chart and sparked fears the Chinese company is quickly catching up with OpenAI's ChatGPT while costing far less.