DeepSeek Resets AI Development Landscape, Driving Stock Market Volatility
DeepSeek, a burgeoning Chinese AI company, has unveiled RI, an AI model that rivals ChatGPT at a significantly lower cost. This revelation has raised fundamental questions about the financial requirements for developing cutting-edge AI models.
Snowflake's Insight
Snowflake CEO Sridhar Ramaswamy believes DeepSeek's emergence challenges the assumptions about AI development. While acknowledging the ongoing innovation potential, Ramaswamy questions the necessity of billions-dollar investments for world-class models.
Market Reaction
DeepSeek's news triggered a sharp sell-off in technology stocks, led by Nvidia (NVDA). Fears over excessive spending on AI infrastructure led to a $588.8 billion loss in Nvidia's market value, the largest single-day decline in absolute terms. Shares have continued to decline, with an overall 11% loss this year.
Microsoft's Resilience
Despite its OpenAI investment, Morgan Stanley analyst Brian Nowak remains optimistic about Microsoft (MSFT). He suggests that Apple (AAPL) may benefit from the DeepSeek-related decline in the "Magnificent Seven" tech giants.
China's AI Threat
Ramaswamy emphasizes the need for investors to monitor DeepSeek's Chinese rivals closely. He believes their sudden emergence highlights the ongoing innovation potential in the AI field.
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