4d ago

Is DeepSeek about to cause a stock market crash?

uk.finance.yahoo.com Is DeepSeek about to cause a stock market crash?

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.

You're viewing a single thread.

104 comments

Could this be considered a living example of a production difference between a system focused on profit and a system focused on use value?
I know China is participating in profit making, but the cost difference here is so gigantic that one would think this makes people see the forest from the trees so to speak.
- Not really. Firstly, I think the two "production differences" are more similar than you think, in that they are closely coupled. Secondly, this is just a petite bourgeois company (relatively petite, at least) doing what a petite bourgeois company does. This is the entire "point" of this niche of the bourgeoisie and is not unique to China right now, although China is executing it better than some other countries obviously. The structures are not meaningfully different between the west and China, really just goes to show how ripe "AI" (LLMs) are for further "development".
  
  Thank you for the input, I agree that they at least seem closely coupled. But on a system level these systems are different and are producing very different results.
  Do we then think this could have been developed anywhere in the capitalist West just as well?
  Is not the logic of what sort of things labor power is used on and what projects get implemented affected by the system a product is made in? Would this startup get funded in a capitalist country and is it based on profit as much as the ones we have here? Why is the financial grift missing from the final numbers.
  
  Do we then think this could have been developed anywhere in the capitalist West just as well?
  Yes pretty much. The west investing quite heavily into AI, so a small research team may have done something similar.
  The real "only state planning can do this" projects are stuff like the Chinese HSR and space program, which are incredibly impressive.

104 comments