DeepSeek could spark a shift from hardware to software, similar to what happened to traditional computing beginning in the 1990s.

Entrepreneur Marc Andreessen, known for co-writing Mosaic, one of the world’s first web browsers, wrote Sunday on X that “DeepSeek R1 is AI’s Sputnik moment,” likening it to the space race between the U.S. and the Soviet Union and the event that forced the U.S. to realize that its technological abilities were not unassailable.

Chinese artificial intelligence startup DeepSeek rattled the U.S. technology sector after the company recently unveiled an AI model that is competitive with leading U.S. models b

The tech-heavy Nasdaq composite closed down nearly 3% on Monday, with shares of AI-focused chipmaker Nvidia plunging 17% and shaving nearly $590 billion from the company’s market cap.

Silicon Valley and Washington leaders said the app shows China can challenge the U.S. The Nasdaq lost 3 percent and chipmaker Nvidia shed $589 billion in market capitalization.