DeepSeek’s AI Model Raises Concerns Over U.S. Technological Edge
Chinese AI startup DeepSeek has launched a new AI model that operates efficiently on less-advanced chips, raising concerns over the technological edge of the U.S. This innovation prompts questions about the high valuations of companies like Nvidia.
- DeepSeek's model is recognized for being cost-effective and could disrupt the AI supply chain reliant on heavy investments from major players.
- Nasdaq 100 futures fell nearly 2.5%, and S&P 500 futures dropped 1.4% following the announcement. Nvidia shares declined over 5% in Asia.
- Chinese AI stocks, including Merit Interactive Co., gained traction amid positive market sentiment.
- DeepSeek competes with OpenAI and Meta, with its app rapidly climbing Apple’s App Store rankings.
- The success of DeepSeek challenges assumptions about Silicon Valley's investment strategy in advanced technology.
- Trade restrictions by Washington appear ineffective as DeepSeek utilized open-source technology to advance its model.
- Emerging competition from Chinese firms may narrow the gap in AI innovation between China and the U.S.
- Upcoming earnings reports from major tech players like Apple and Microsoft will be crucial for investor confidence amid the AI-driven market rally.