DeepSeek, the Chinese artificial intelligence startup, has been hit by “large-scale malicious attacks”.
To mitigate the impact, it has temporarily restricted new user registrations. However, those who already have an account on the platform can log in as usual, according to the company.
The large-scale attacks on DeepSeek arrived only hours after its AI assistant dethroned ChatGPT as the most downloaded free app on Apple devices in the US.
Cyberattacks have been on the rise
DeepSeek is the latest on a fairly long list of notable companies that have suffered cyberattacks since the start of 2024.
These include Change Healthcare which was hit with a ransomware attack last February, resulting in disruptions in healthcare services across the United States, affecting hospitals’ ability to process payments and prescribe medications.
Later in April, a widespread breach compromised accounts stored on Snowflake’s cloud platform.
High-profile victims included AT&T and Santander Bank, with attackers stealing sensitive data and extorting millions.
Cyberattacks are estimated to cost the global economy more than $10 trillion by the end of 2025.
Cyberattack on DeepSeek: could it be planned?
DeepSeek has recently launched an AI model called the “R1” that matches or even outperforms OpenAI.
Yet, it was built at a fraction of the cost and is super affordable to operate as well.
The Chinese startup itself is not publicly available to trade – but its announcement did rattle shares of a broad basket of AI stocks worldwide.
So, given the timing, it’s reasonable to believe that the cyberattack could be intended to disrupt the company’s fast-growing influence on the global artificial intelligence market.
DeepSeek is already being touted as a serious competitor to more established names like Anthropic (Claude), Google (Gemini), and, of course, OpenAI (ChatGPT). Even shares of Nvidia, the AI darling, are down significantly on Monday.
Should Nvidia shareholders be nervous?
Experts are divided on the potential impact that DeepSeek could have on the likes of Nvidia.
On the one hand, its new offering could hurt the demand for NVDA products since it suggests that companies can meet their artificial intelligence requirements without necessarily having to opt for Nvidia’s costly AI chips.
On the other hand, however, US hyperscalers could stick to Nvidia’s high-end GPUs to build even more powerful AI models – and so, NVDA could remain the front and center of the artificial intelligence debate moving forward.
That’s the narrative that made analysts at Bernstein label the sell-off in AI stocks today as “overblown”.
If so, shares of Nvidia at $118 at writing could be an opportunity for investors to buy a quality name at a deep discount.
Wall Street currently sees an upside in NVDA stock to $175 on average which indicates potential for a 45% upside from current levels.
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