An artificial intelligence startup in China has suddenly become more popular than ChatGPT in app stores, shaking the confidence of American investors and leaving tremors throughout the stock market. With a model that offers comparable performance at seemingly a fraction of the cost, the DeepSeek chatbot is causing a reckoning in the tech industry over American dominance.

Challenging the 'bigger is better' narrative
The U.S. has imposed sanctions on advanced chip sales to slow down progress in AI elsewhere. At the same time, U.S. tech giants rely on sprawling data centers powered by Nvidia GPU chips. These sanctions have "cut China off from critical AI hardware, forcing its developers to innovate with far fewer resources," said The Spectator. This is the environment that led to the birth of DeepSeek. The relatively unknown Chinese AI startup has "emerged as a formidable challenger to the 'bigger is better' narrative." 

In a 22-page paper that sent shockwaves through the tech world, the company revealed its new AI model, DeepSeek-R1, uses drastically fewer Nvidia chips than other AI companies, making it priced at a much lower cost. The model highlights U.S. export restrictions, which were supposed to "prevent a breakthrough of the sort that DeepSeek appears to represent," said Bloomberg.

Once DeepSeek's AI was released as open-source software, the industry's "skepticism morphed into worry," said The New York Times. When its mobile app hit the top spot on Apple's App Store, that worry "tipped into full-blown panic." This is "AI's Sputnik moment," venture capitalist Marc Andreessen said on X.

Shock to the market
Investors' concerns triggered a swift and brutal reaction. On Monday, the share price of U.S. chipmaker Nvidia dropped by 17%, losing more than $600 billion in market value. Google owner Alphabet and Microsoft also took massive hits, dropping $130 billion and $80 billion, respectively. 

The U.S. has "stupidly engineered a very concentrated stock market that rises and falls in part on the level of AI joy or despair," David Dayen said at The American Prospect. Our stock market "runs on AI hype." 

DeepSeek's success "upends the investment theory that drove Nvidia to sky-high prices," said The Verge. It suggests that "small startups can be much more competitive with the behemoths, even disrupting the known leaders through technical innovation."

Rebels led by the M23 armed group claim to have taken control of Goma, a key city in the eastern Democratic Republic of the Congo. The rapid advance represents a severe escalation of a long-standing conflict that has triggered one of the world's biggest humanitarian crises. More than 400,000 people have been displaced, and at least 13 soldiers from international peacekeeping forces have been killed, since the start of this year alone, according to U.N. estimates. 

What's M23? 
The eastern hills of DR Congo, bordering Rwanda, are a "tinderbox of rebel and militia fiefdoms," said The Guardian, "stemming from two regional wars" that erupted on Congolese soil after the 1994 Rwandan genocide. M23, which formed in 2012 as an offshoot of another group, takes its name from the March 23, 2009, peace deal that ended a previous uprising. 

The group is mostly made up of former Congo soldiers who defected from the army, accusing the government of failing to uphold that agreement. They are primarily ethnic Tutsis, nearly a million of whom were murdered in the Rwandan genocide. 

It's one of about 100 armed groups "vying for a foothold in the mineral-rich region," said Sky News. M23 briefly took over Goma in 2012 but was "pushed out" in 2013, said Al Jazeera. It "resurfaced" in 2021, "possibly because of renewed Rwandan support," and has since taken control of vast swaths of eastern Congo. 

What does it want? 
M23 says it fights in defense of ethnic Tutsis in Congo, who face discrimination and violence from ethnic Hutu militias. But Congo has huge supplies of minerals including gold, tin, copper, coltan and cobalt, and M23 seeks to "gain control" over the region's resources, said DW. The group is already generating substantial sums per month from taxes on coltan production in mining towns under its control. 

Who is it fighting? 
The rebels are battling the Congolese army and its allied forces, including U.N. peacekeeping troops and soldiers from the 16 countries that make up the Southern African Development Community. The U.S., France and the U.K. have said Rwandan troops are supporting M23. Rwanda has consistently denied providing financial and logistical support to the group, but Congo has severed ties with its neighbor over the issue.