By Mackenzie Tatananni

Rigetti Computing, Quantum Computing, and peer stocks dropped along with many of their larger rivals after DeepSeek, a Chinese start-up, sparked concerns about competition in the artificial-intelligence market.

Rigetti Computing and Quantum Computing saw the biggest declines of the quantum stocks, falling 6.5% and 6.8%, respectively, in morning trading. IonQ was down 3.6%, while D-Wave Quantum fell 6%.

DeepSeek was founded in 2023 and released its first model, DeepSeek Coder, in November of that year. The AI lab has quietly rolled out open-source large language models for more than a year.

However, DeepSeek made headlines on Monday after its chatbot surpassed ChatGPT as the highest-rated free app on Apple's App Store.

The V3 model powering the chatbot is widely seen as a ChatGPT rival, and researchers claim it performs better in certain mathematical and reasoning tasks, and that the cost to train it was far lower than for systems from competitors like Alphabet and Meta.

So, where does quantum computing fit in? AI and quantum systems are often seen as symbiotic, with proponents arguing that quantum computing can rise to meet the challenges AI presents, including an increased appetite for energy.

DeepSeek has infused fear into the markets for similar reasons. It is more efficient than competitors from U.S.-based companies, meaning it and models of the future could require less power, spelling trouble for nuclear power companies like Constellation Energy.

The three major stock indexes were down in early trading, with the tech-heavy Nasdaq Composite declining the most at 2.7%.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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January 27, 2025 09:59 ET (14:59 GMT)

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