With the stock market dominated by US tech companies focused on AI, is DeepSeek's competitor to OpenAI about to brings things crashing down? The post Is DeepSeek about to cause a stock market crash? appeared first on The Motley Fool UK.

I think we’re about to get a crash in 5 hours folks

The companies known as the Magnificent Seven make up over 20% of the global stock market. And a lot of this is based on their perceived advantage when it comes to artificial intelligence (AI).

The big US tech firms hold all the aces when it comes to cash and computing power. But DeepSeek – a Chinese AI lab – seems to be showing this isn’t the advantage investors once thought it was.

DeepSeek doesn’t have access to the most advanced chips from Nvidia (NASDAQ:NVDA). Despite this, it has built a reasoning model that is outperforming its US counterparts – at a fraction of the cost.

Investors might be wondering about how seriously to take this. But Microsoft (NASDAQ:MSFT) CEO Satya Nadella is treating DeepSeek as the real deal at the World Economic Forum in Davos:

“It’s super impressive how effectively they’ve built a compute-efficient, open-source model. Developments like DeepSeek’s should be taken very seriously.”

Whatever happens with share prices, I think investors should take one thing away from the emergence of DeepSeek. When it comes to AI, competitive advantages just aren’t as robust as they might initially look.

  • came_apart_at_Kmart [he/him, comrade/them]@hexbear.netEnglish
    22·
    3 days ago

    my analysis is roughly the same as yours. I also think 80% of the buzz around AI is just that… every US tech company has been rebranding existing services as somehow incorporating “AI”. I don’t watch a ton of commercials, but when I do see them, tech firms seem to all be investor-oriented hype messaging about how IBM or Apple or Dell Systems or whoever are using “AI” to do/make computer better-good for happy human.

    everyone is just saying “AI” about everything.

    to me, the market wealth associated is a speculative bubble around a term that has become meaningless.

    of course an open source project from China is blowing proprietary performance benchmarking out of the water. the proprietary black box is always smoke and mirrors to attract capital to the secret, inscrutable sauce that is really just watered down ketchup and mayo.