DeepSeek is a Chinese artificial intelligence provider that develops open-source LLMs. R1, the latest addition to the company’s model lineup, debuted last week. The release of the LLM caused a broad selloff in AI stocks that sent Nvidia Corp.’s shares plummeting 17% on Monday, along with many other technology stocks.

DeepSeek-R1 is the groundbreaking reasoning model introduced by China-based DeepSeek AI Lab. This model sets a new benchmark in reasoning capabilities for open-source AI. As detailed in the accompanying research paper,

David Sacks says OpenAI has evidence that Chinese company DeepSeek used a technique called "distillation" to build a rival model.