Name of opportunity: 👀
DeepSeek
DeepSeek triggers AI stock selloff 🤖
DeepSeek is a Chinese artificial intelligence (AI) app that has taken the market by surprise as it has overtaken its rival ChatGPT to become the top-rated free app on the Apple app store in both the US and UK, and China too. Like ChatGPT, DeepSeek is an AI chatbot.
An interesting thing about DeepSeek is that there are reports of it only costing around $6 million to develop, making it a low-cost AI model. This claim has been disputed by others however. This is interesting as it challenges the idea that AI giants need to keep spending billions to stay ahead. DeepSeek has been praised for its performance on reasoning, computation and 3D rendering, challenging its more established rivals.
DeepSeek has sent the stock price of AI leaders Nvidia and Microsoft down as a result. This might be because of DeepSeek’s impact on the market currently, as it is a significantly cheaper option in the AI space at the moment. It also challenges the idea that the U.S cannot be beaten when it comes to AI technology.
What’s next? 🤔
Nvidia fell as much as 14% in pre-market trading today, with this AI giant perhaps under threat from DeepSeek the most. DeepSeek’s AI model was built using Nvidia’s lower capability chips, putting the value of the company’s premium chips under question to some investors.
The following big tech companies are set to announce their earnings this week.
Meta, Tesla, and Microsoft are reportedly releasing earnings on 29th, with Apple following on the 30th. Nvidia’s next earnings date is set to be on 26th February. It will be interesting to see how DeepSeek has potentially affected the magnificent 7, and how these companies plan to tackle the changing-market and future competitors.
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