DeepSeek: Is China's AI tool as good as it seems?
Published On Jan 27, 2025, 3:11 PM
DeepSeek, a new Chinese AI chatbot launched recently, has created significant market turmoil in the US, undermining faith in American AI technology dominance. The chatbot operates like existing services, such as ChatGPT, but often avoids direct opinions and censors politically sensitive topics. While it can respond quickly, it is currently overwhelmed with traffic. Analysts suggest that recent government investments in AI might influence the app's future and overall market dynamics. DeepSeek utilizes older Nvidia chips and open-source structures from Meta and Alibaba, indicating a potential challenge to the existing monetization models of US AI companies.
Stock Forecasts
NVDA
Negative
The emergence of DeepSeek could introduce competition to US-based AI companies, necessitating shifts in strategy for firms like Nvidia and Meta that supply AI infrastructure. The increased interest in less resource-intensive models could downplay the importance of high-performance chips at this stage.
META
Negative
As DeepSeek's launch highlights a new shift in AI development that requires fewer resources, companies like Meta may find themselves pressured to adapt their monetization strategies in response to competing models emerging from China.
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