In Deep S***
The three letters missing from this headline could refer to one of America’s most popular four letter words. But as anyone who follows the tech industry knows, today’s market is in DeepSeek. What’s the deal? Over the weekend, a relatively new Chinese AI startup called DeepSeek demonstrated an artificial intelligence model that operates for a fraction of the cost of the ones we’ve been using (and investing in). “DeepSeek’s emergence may offer a counterpoint to the widespread belief that the future of AI will require ever-increasing amounts of power and energy to develop.” It also appears to be offering a counterpoint to the belief that America is ahead in AI development and that the stock prices for companies like Nvidia have nowhere to go but up. Bloomberg (Gift Article): What Is China’s DeepSeek and Why Is It Freaking Out the AI World? FWIW, I asked ChatGPT about DeepSeek and the impact on the stock market and it didn’t seem to know what I was talking about. “It sounds like you’re referring to ‘DeepSeek,’ but l’m not sure exactly what specific entity or event you mean by that.”
+ “The Chinese A.I. company DeepSeek has made waves by matching the abilities of cutting-edge chatbots while using a fraction of the specialized computer chips that leading A.I. companies rely on. That has prompted investors to rethink the large returns implied by the heady valuations of companies like Nvidia, whose equipment powers the most advanced A.I. systems, as well as the enormous investments that companies like Google, Meta and OpenAI are making to build their A.I. businesses.” NYT (Gift Article): Stocks Sink as Investors Worry About China’s A.I. Advances.
+ Is DeepSeek being totally honest about its cost of doing business? We might not know for sure. But what we do know for sure is that investors and techies weren’t entirely sure they were making smart bets when it comes to AI. Hence the reaction to the DeepSeek news. “When lots of people are worried about bubble valuations in stocks or a specific sector, all it takes is a small poke to make the whole thing wobble precariously. Why it matters: That can cost investors $1 trillion or more in a single day, as happened Monday with the global AI rout.” The anatomy of a bubble bursting.
