DeepSeek is causing havoc throughout the AI industry. U.S.-based tech companies that have heavily invested in AI saw their stocks take a tumble this week after the China-based startup released a new AI model on par with OpenAI's latest model, yet much cheaper to train — plus, DeepSeek made it free and open source.

DeepSeek built top-performing AI models using less-advanced chips at what it says is a fraction of the cost of rivals such as OpenAI.

OpenAI—which faces multiple lawsuits for using content without permission—accuses DeepSeek of 'distillation,' a technique that use larger models' outputs to improve smaller ones.