At the start of 2025 the AI industry and stock market were both blindsided.

By the end of Monday, Jan. 27, nearly $1 trillion in value had been wiped off the Nasdaq 100. U.S. tech companies that had invested billions of dollars in AI now faced new competition from DeepSeek, a Chinese AI startup. Supposedly only costing $6 million to develop, and as intelligent as OpenAI’s reasoning models, the open-source application became the most downloaded free app for iPhone when released.

For Brandon Nuttall, chief digital and AI officer at industry data solutions provider Xceedance, this was a Sputnik moment for the AI industry–referring to moment in which the Soviet Union surprised the United States and jump-started the space race in 1957 by sending the first artificial satellite into space. In this podcast, Nuttall discusses the risks for companies that use DeepSeek, how the AI was created, and why it needs significantly less energy than other large language models.