People across China have taken to social media to hail the success of its homegrown tech startup DeepSeek and its founder, after the company unveiled its newest artificial intelligence model, sending shock waves through Silicon Valley and Wall Street.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.

DeepSeek has delighted the Chinese internet ahead of Lunar New Year, the country's biggest holiday. It's good news for a beleaguered economy and a tech industry that is bracing for further tariffs and the possible sale of TikTok's US business.

DeepSeek’s latest models, created by a small company with limited resources, are already beating many of the leading AI models in the United States.

The company built a cheaper, competitive chatbot with fewer high-end computer chips than U.S. behemoths like Google and OpenAI, showing the limits of chip export control.

DeepSeek, a Chinese artificial-intelligence startup that’s just over a year old, has stirred awe and consternation in Silicon Valley after demonstrating AI models that offer comparable performance to the world’s best chatbots at seemingly a fraction of their development cost.

DeepSeek has Silicon Valley in awe and investors in a frenzy.The Chinese artificial-intelligence upstart has shot to prominence after saying it had trained high-performing AI models cheaply, without the most advanced chips.

The Chinese AI firm’s new model is rattling the tech industry and the stock market. Here’s some of the smart commentary on why.