DeepSeek’s advice for South Korea’s AI ambitions
February 3, 2025
SEOUL – Time passes regardless of what we do — whether we study, work, pause for rest or sleep after a long day of hard work. Most of us were enjoying an extended Lunar New Year holiday in South Korea when the world was rocked by the debut of a groundbreaking generative AI model developed by a Chinese startup.
Global capital markets experienced significant turbulence following the introduction by China’s DeepSeek of a generative AI model with the same name. Developed at a fraction of the cost of its American counterparts, DeepSeek demonstrated capabilities comparable to or even stronger than leading AI systems, challenging the dominance of major US tech companies.
US tech giants, particularly those heavily invested in artificial intelligence, saw substantial declines in their stock valuations. Nvidia, for instance, suffered a historic 17 percent drop, wiping $589 billion from its market capitalization in one day, although it recovered some of the losses thereafter. Other major tech firms also faced significant stock price downturns.
In response to these developments, policymakers and industry leaders around the world are closely monitoring the situation, with the US launching a review to assess the implications of DeepSeek’s AI model regarding data privacy and potential foreign influence operations. Analysts are also evaluating the broader impact on the AI industry, considering the possibility of a shift towards more cost-effective and open-source innovations.
South Korean capital markets also reacted violently when they reopened for trading on January 31 after the four-day rout. Share prices of chipmakers Samsung Electronics and SK Hynix plunged, while those of companies like Naver and Kakao surged as