Image source, Reuters

Moving away from US trading for a moment, we've just heard that Microsoft-backed OpenAI has launched a tailored version of ChatGPT designed for US government agencies, amid competition from the likes of DeepSeek.

It comes hours after OpenAI chief Sam Altman described DeepSeek as "an impressive model, particularly around what they're able to deliver for the price".

Though, he added that OpenAI would "obviously deliver much better models" moving forward and that the firm would "pull up some releases".

Altman said it was "invigorating to have a new competitor" after DeepSeek overtook ChatGPT in downloads from Apple's store.

Mixed start for Nvidia after DeepSeek prompted huge losspublished at 15:09 Greenwich Mean Time 28 January

15:09 GMT 28 January

Nick Edser
Business reporter

It’s been a mixed start to trading for Nvidia shares. After rebounding slightly in the first few minutes, they fell back, but have now recovered again to stand 1.3% higher.

Among the main US stock indexes, both the Dow Jones and S&P 500 are barely changed, while the tech-based Nasdaq is up 0.4%.

Often when there has been a big sell-off in shares, buyers return to the market looking for bargains if they think prices have fallen too far. But there’s no guarantee that prices will rebound.

It’s worth remembering that investors who bought Nvidia shares a year ago are still sitting on a decent profit.

Even after yesterday’s 17% fall, Nvidia’s shares are back to where they had been only last October.

Nick Edser
Business reporter

It looks like the mini-rebound might already be petering out, but let's wait and see how this plays out.

As a reminder, prices often are quite volatile at the start of trading. Stick with us.

Nick Edser
Business reporter

Early indications are that tech shares have stabilised, for now.

The tech-heavy Nasdaq stock index, which fell more than 3% on Monday, is up 0.2% so far.

Among some of the tech giants, Google-owner Alphabet is up 0.1% but Microsoft shares are down 0.6%

Nick Edser
Business reporter

Trading has just restarted in the US and Nvidia shares have risen 1.5% in the first few minutes.

This marks a small rebound from the 17% fall seen on Monday.

After a history-making day in the US stock market on Monday, the market has opened once again.

Stay with us as we bring you the latest on the impact of DeepSeek.

Image source, EPA

After it sent shockwaves through the US tech industry yesterday, Chinese artificial intelligence start-up DeepSeek is entering "holiday mode" for Lunar New Year, according to the South China Morning Post.

The newspaper reports that the Hangzhou-based start-up, including founder Liang Wenfeng and the firm’s young scientists, have "gone quiet" and are "shunning public attention" as China entered its week-long holiday.

They also say that DeepSeek made its last update at midnight on Monday - Lunar New Year's Eve - and the AI start-up's office building was found deserted on Tuesday morning.

South China Morning Post also reports that the start-up has seen "many uninvited visitors" coming to DeepSake's office in the last two days.

The US stock market was startled on Monday, with chip giant Nvidia losing almost $600bn (£482bn) in market value.

As the markets closed on Tuesday, Tokyo's Nikkei 225 index dropped 1.39%.

Hong Kong's Hang Seng made a 0.14% gain.

Markets in Taiwan, South Korea and China, are closed for the Lunar New Year holiday.

AI chip-maker Nvidia saw investors make a swift exit yesterday, after the emergence of DeepSeek, suffering its biggest single-day loss in Wall Street history.

The US tech giant lost over a sixth of its value after the rise of the Chinese AI chatbot, its stocks plunging by more than 16% and more than $500bn off its value being wiped off its market value.

That's the equivalent to lose about the entire market valuation of oil giant Exxon, or credit card giant MasterCard.

However, Nvidia is still worth more than $2.9 trillion. In fact, only Apple and Microsoft are currently ranked ahead of Nvidia in terms of market valuation.

Like many other Chinese AI models - Baidu's Ernie or Doubao by ByteDance - DeepSeek is trained to avoid politically sensitive questions.

When the BBC asked the app what happened at Tiananmen Square on 4 June 1989, DeepSeek did not give any details about the massacre, a taboo topic in China.

Watch its response below:

Image source, Reuters

DeepSeek was founded in December 2023 by Liang Wenfeng and released its first AI large language model the following year.

Not much is known about Liang, who graduated from Zhejiang University with degrees in electronic information engineering and computer science.

He was recently seen at a meeting hosted by China's premier Li Qiang, reflecting DeepSeek's growing prominence in the AI industry.

He is the CEO of a hedge fund called High-Flyer, which uses AI to analyse financial data to make investment decisions - what is called quantitative trading. In 2019 High-Flyer became the first quant hedge fund in China to raise over 100 billion yuan ($13m).

In a rare interview last year, he said China's AI sector "cannot remain a follower forever".

Asked why DeepSeek's model surprised so many in Silicon Valley, he said: "Their surprise stems from seeing a Chinese company join their game as an innovator, not just a follower - which is what most Chinese firms are accustomed to."

Australia's science minister, Ed Husic, has become the first member of a Western government to raise privacy concerns about DeepSeek, saying many questions remain unanswered about the app, including its "data and privacy management".

"I would be very careful about that, these type of issues need to be weighed up carefully," Husic told ABC News.

Chinese tech, from Huawei to TikTok, has repeatedly been the subject of allegations the firms are linked to the Chinese state, and fears this could lead to peoples' data being harvested for intelligence purposes.

Asked by BBC News if it shared the Australian government's concerns, it said in a statement: "We will continue to engage with stakeholders on promoting effective transparency measures, without shying away from taking action when our regulatory expectations are ignored."

• Read more about the data DeepSeek collects

Image source, Reuters

US President Donald Trump has called the rise of Chinese company DeepSeek "a wake-up call" for the US tech industry.

He said the latest developments in China's AI industry may be "a positive" for the US.

"If you could do it cheaper, if you could do it [for] less [and] get to the same end result. I think that's a good thing for us," he told reporters on board Air Force One.

Trump also said he was not concerned about the breakthrough, adding the US will remain a dominant player in the field.

Image source, Getty Images

DeepSeek is a free AI-powered chatbot, which looks, feels and works very much like ChatGPT.

The AI model that powers DeepSeek - known as R1 - is reportedly as powerful as the OpenAI o1 model behind ChatGPT when performing tasks such as mathematics and coding.

The R1 models produce responses incrementally, simulating a process similar to how humans reason through problems or ideas. It uses less memory than its rivals, ultimately reducing the cost to perform tasks.

Chinese government censorship was thought to be a huge challenge for developing AI. But DeepSeek appears to have been trained on an open-source model, which enables it to perform complex tasks while also withholding certain information.

And it says it has been able to do this cheaply, with researchers behind it claiming it cost $6m (£4.8m) to build - though the cost of development outside of training the model is unknown.

Nick Edser
Business reporter

Monday proved to be a traumatic day for several tech stocks after the emergence of DeepSeek’s AI model sent a shudder across markets.

The most notable victim was US chip giant Nvidia. Its shares fell 17%, cutting its stock market value by about $593bn (£433bn) - the biggest single-day loss in US market history.

Other tech stocks also took a bruising.

• Microsoft fell 2%
• Google-owner Alphabet lost 4%
• and Dell Technologies – which makes AI servers – sank 8.7%

And it wasn’t only tech stocks that were affected. Power companies – which were expected to benefit from the demand for power to drive AI data centres – saw big losses, with Vistra Corp plunging 28%.

The falls had a knock-on effect in Asian markets on Tuesday. Shares in Japanese AI-related firms - including Advantest, Softbank and Tokyo Electron - all fell sharply.

However, there are signs that a partial rebound could be coming, with Nvidia shares expected to see a small rise when trading restarts in the US at 09:30 EST (14:30 GMT).

Nvidia shares have soared in the past year as excitement around the potential for AI has built, so while the 17% fall on Monday was dramatic, AJ Bell investment director Russ Mould notes that this only pulls the share price back to levels seen in October last year.

Nabiha Ahmed
Live reporter

Image source, Reuters

We're just over an hour away from the New York Stock Exchange opening on a day that could again prove dicey for American tech stocks.

Monday saw the Chinese AI app DeepSeek send shockwaves through Wall Street after it shot to the top of the Apple Store's downloads - stunning investors and causing the value of some tech stocks to take a hit.

Launched last week, the app's emergence has been dubbed as "AI's Sputnik moment", after US tech giant Nvidia lost over a sixth of its value as a result of DeepSeek's surging popularity. That's Nvidia's biggest single-day loss in Wall Street history.

What makes DeepSeek so special, you ask?

It claims that its R1 model was made at a fraction of the cost of its rivals - threatening the future of America's dominance in the AI industry.

Our business team is poised to bring you all the latest from the US stock market when it opens at 09:30 EST (14:30 GMT). Stick with us, and we'll bring you all the relevant updates throughout the trading day.

Thomas Mackintosh
Live reporter

Image source, Reuters

The price of some tech stocks has continued falling on Asian markets as a result of the release of a low-cost AI chatbot which launched last week. It has overtaken rivals including ChatGPT to become the most downloaded free app in the United States.

The DeepSeek app was reportedly developed for a fraction of the cost of its rivals, raising questions about the future of America's AI dominance and the scale of investments US firms are planning.

Its emergence, which has been hailed as a "Sputnik moment", caused some tech shares and stocks to tumble - including the US chipmaker Nvidia which suffered the biggest single-day loss in Wall Street history.

Only a few hours ago US President Donald Trump referenced DeepSeek's breakthrough during an address to Republican congressmen and women in Miami.

He hailed the breakthrough as positive news and suggested it is a "wake-up call" for the US tech industry.

We will be bringing our coverage to an end shortly - but for more detailed reading check out everything you need to know about DeepSeek and why it caused tech stocks to drop.

Joao Da Silva
Business reporter

DeepSeek's ability to create highly disruptive AI models is casting doubt over the effectiveness of US restrictions on the export of advanced computer chips to China.

The US has been tightening those trade curbs since 2022 in the hope that they would help keep it ahead in the race to develop powerful AI systems.

"I’d say they are starting to fail to give the US an edge, because now it has become a totally different game to play, and DeepSeek is the game changer," said Wei Sun, an AI expert with technology research firm, Counterpoint Research.

Others argued that the trade curbs ended up giving Chinese AI developers a boost.

"The export restrictions have inadvertently pushed Chinese tech companies like DeepSeek to become more creative and efficient," said Marina Zhang, an associate professor at the University of Technology Sydney, who focuses on China's high-tech industries.

"DeepSeek’s success demonstrates that constraints can drive creativity, challenging the assumption that technological leadership is solely dependent on hardware superiority."

Fan Wang
BBC News, Singapore

The Chinese internet has been excited by DeepSeek's shoot-to-fame since the weekend.

It's been a while since there has been good news for Chinese tech - the noises around TikTok and its parent company ByteDance, a Chinese-owned company, have overshadowed the industry's glory to international audiences for a long time.

But now the Chinese feel vindicated. At this holiday season of Lunar New Year, the biggest holiday for Chinese, the most trending topics on Chinese social media are about AI and DeepSeek.

This morning, on popular social media platform Weibo, many top-trending hashtags are related to the AI tool. The topic "What is DeepSeek " has generated more than 11 million views, with state broadcaster CCTV's post on this leading the discussion.

Other trending hashtags include "the three AI heroes from Guangdong" - DeepSeek's founder Liang Wenfeng is one of them, and "Hangzhou six little dragons" - a phrase to describe the six star new tech companies that are based in the city of Hangzhou.

"DeepSeek shows us that only if you have the real deal will you stand the test of the times," a top-liked Weibo comment reads. "This is the best new year gift. Wish our motherland prosperous and strong," another reads.

US President Donald Trump says the latest developments in China's AI industry could be good for America because they make the technology cheaper.

"If you could do it cheaper, if you could do it [for] less [and] get to the same end result. I think that's a good thing for us," Trump told reporters on board Air Force One.

He also said he was not concerned about a breakthrough in China's AI industry, adding the US will remain a dominant player in the field.