Apple could benefit from China's DeepSeek, which appears to deliver cheaper AI models. Its competitors have already spent big on their own efforts.

The AI model that shook the world is part of a broad trend to squeeze more out of chips using what's called sparsity.

Tech stocks tumbled as Chinese AI startup DeepSeek's advances raised fears of intensified competition, shaking investor confidence. This live blog is closed.

DeepSeek’s success, they said, isn’t a bad thing for the domestic industry but it is “a wake-up call to U.S. AI companies obsessed with gargantuan (and expensive) solutions. ‘Doing more with less’ underpins the approach taken at several Chinese state-funded labs.”

The news of the focus on AI came as part of a leaked memo from Apple's head of AI John Giannandrea. According to memo, the AI group is "focused on revamping the underlying infrastructure of Siri and improving the company's in-house AI models."

Apple emerges as a “relative winner” as DeepSeek shifted investor narratives on AI, wrote Morgan Stanley analysts led by Brian Nowak in a Tuesday note to clients, explaining Apple’s “AI ambitions are far more contained” than the other “magnificent seven” American tech leaders.

Apple released a software update for iPhones, iPads and Macs that turns Apple Intelligence on by default for users with supported devices.

Approximately $1 trillion is set to be spent globally on AI development in the coming years, according to estimates by Goldman Sachs. But DeepSeek developed its AI model for $6 million, according to Wedbush Securities analyst Dan Ives.

As Chinese AI application DeepSeek attracts hordes of American users, Trump administration officials, lawmakers and cybersecurity experts are expressing concern that the technology could pose a threat to U.S. national security.

The spotlight on DeepSeek comes amid rising tensions over trade, geopolitics and other issues between the two superpowers. The U.S. has already imposed significant export controls on China in an effort to rein in Beijing's production of semiconductors used in developing advanced AI, with the most recent curbs coming in December.