DeepSeek Wipes $1 Trillion Off American Tech Firms’ Value, Then Faces Large-Scale Cyber Attacks

Those two things are unrelated though. Right? It’s just a coincidence, right?

Listen, I will be frank with you. I am not above donning the proverbial tin-foil hat sometimes. This is one of those times, and I have good reason to side-eye this DeepSeek story.

As we talked about yesterday, DeepSeek, the Chinese answer to ChatGPT, Gemini, Copilot, Meta AI, etc., has really shaken up the space. You know it is huge when even the American president, Donald Trump, comments on it.

He said he read about it being a “faster method of AI and [a] much less expensive method….” He did not immediately think to hit it with tariffs but rather says it should be “a wake-up call for our industries that we need to be laser-focused on competing to win.”

Trump explains why he actually loves the success of DeepSeek, saying, “That’s good because you don’t have to spend as much money. I view that as a positive, as an asset.”

He is seeing the silver lining, but American companies that have spent billions of dollars building their products are taking a beating on the stock markets. How could they not, when something that cost less than 3% of what theirs cost is kicking their collective behinds?

Here’s what some of the companies that have built their fortunes on the AI boom have lost since DeepSeek exploded onto the scene:

• Nvidia shares fell 17%, or around $600 billion in value. Remember, at the current rates of GDP, Zimbabwe needs about 20 years to produce that much. So, that’s a significant fall-off, enough to be the biggest fall in US stock market history.
• Alphabet (Google) lost $100 billion.
• Microsoft lost $7 billion.
• In total, $1 trillion was wiped in value.

It wasn’t just American firms that were affected. Everyone in the game, from Japan to the Netherlands, saw their stocks fall.

DeepSeek progress halted

Here is where my tin-foil hat comes in. Just as DeepSeek was riding this wave, it suddenly started struggling to register new users. I shared yesterday how I have been failing to register for days.

I thought this must mean they just didn’t expect this level of demand, and their servers are failing to deal with it. We have seen this before.

However, DeepSeek investigated the issue and found that it was quite sinister. DeepSeek experienced a cyber-attack on Monday, which led the company to temporarily limit new user registrations.

According to its status page, DeepSeek began investigating the issue late Monday night (Beijing time) and identified it as a “large-scale malicious attack” after two hours of monitoring. Despite the registration limits, existing users were able to log in without disruption.

This is what I saw on the DeepSeek webpage:

The banner up top reads, “Due to large-scale malicious attacks on DeepSeek’s services, registration may be busy. Please wait and try again. Registered users can log in normally. Thank you for your understanding and support.”

Tin-foil hat time

Okay, so here’s the sequence of events:

1. American firms invest billions to build out AI solutions.
2. A Chinese firm shakes up the sector with a solution 10,000 times cheaper.
3. This leads to American firms losing over $1 trillion in value.
4. As said Chinese firm’s solution’s popularity soars, it suffers large-scale malicious attacks.

I’m not saying the Americans did it, or rather, are doing it, since it is ongoing. All I’m saying is that $1 trillion is a hell of a motive.

I pride myself on being somewhat of a legal drama aficionado, having watched too much TV. As an armchair lawyer, I know you need to establish motive, means, and opportunity, among other things.

I’d say the motive is self-evident. I doubt that anyone would doubt that the American firms in question would have the ability (means/skills) to maliciously attack DeepSeek. This being a cyber-attack, the opportunity to attack was also there because, last I checked, they exist on the same internet as DeepSeek.

If I were judge, jury, and prosecutor, I would convict the American companies of this crime, if there indeed is a crime. I know how the game is played; DeepSeek could be sparing its blushes and claiming a cyber-attack to mask underpreparedness. That’s what the opposing armchair lawyer would claim.

As judge, though, I’d throw it out and convict. But that’s just me. I probably watch too much TV, but I know I can’t be the only one wondering what’s really going on.