The Chinese artificial intelligence app DeepSeek quickly became the number one app in app stores the day it was released to the public. It works similarly to the popular ChatGPT app. The biggest difference is that it was created at a fraction of the cost.
ABC News reports it cost $5.6 million dollars to build DeepSeek. For comparison, ChatGPT cost billions of dollars.
Its quick rise in popularity upended the U.S. stock markets almost immediately. Last Monday, when DeepSeek was announced, the Dow Jones, S&P 500 and Nasdaq all opened in negative territory.
“The large technology companies that were driving the market higher… were considered very hard to compete with,” Bruce Allen, President of Bruce G. Allen Investments, said.
While there are still some discrepancies on exactly how much it cost to build DeepSeek, Allen said the bottom line is it was much less expensive than American AI companies.
Because of that, Allen said DeepSeek could be a big problem for people who have been investing in technology companies, whether that’s in retirement savings or a broad-based index fund.
“Maybe it’s time for investors to look at the opposite of technology companies, which are growth companies” Allen said.
There are three options to consider in order to diversify away from these stocks, Allen advised — value stocks, dividend stocks or funds and equal-weighted indexes.
Allen said it’s always important to talk to your financial advisor or 401K administrator to figure out which investments are right for you.
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