DeepSeek, a Chinese AI startup, has dramatically impacted the tech landscape with its R1 model, leading to Nvidia facing a historic $600bn market loss—its steepest fall ever. This has sent shockwaves across the semiconductor and AI sectors, resulting in a $1 trillion loss for companies like OpenAI and Meta, amid fears that Chinese AI could disrupt existing market dynamics. R1, costing a mere $5.6 million to develop, runs efficiently on personal devices without heavy cloud reliance, driving concerns over US funding strategies and dominance in AI. Silicon Valley's mixed reactions range from admiration to panic, highlighting pivotal shifts in AI development.