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.

  • peppersky [he/him, any]@hexbear.netEnglish
    30·
    3 days ago

    The bubble won’t burst from this (someone else making a cheaper AI product does nothing to the idea that AI itself is a useful product and profitable investment), it’s only once people realize that AI isn’t profitable in the slightest that the bubble will burst.

    • gandalf_der_12te@discuss.tchncs.deEnglish
      9·
      3 days ago

      i think investors are putting money into AI because they don’t really know where else to put it … economic growth is stagnating practically everywhere except maybe africa, but there it’s difficult as well for instability reasons.

      i think technological development is coming to a halt in general. the last steps will be renewable energy and cleaning up the dirty industries, but apart from that, only space exploration (think mars) will provide further economic growth.