2 trillion stock value
DeepSeek, a Chinese startup can create the same as ChatGPT, CoPilot, Grok, etc... for 1/1000th of the cost OpenAI, X, Microsoft and Google are spending on their AI programs. This is the technology news of the day, with a huge economic impact, on the short term, but definitely on the long run too.
DeepSeek manages to perform even better than ChatGPT without the monster chips from Nvidia, they are doing it with simple GPU's instead of thousands and thousands of the 40000 USD chips of Nvidia. Their costs run in the millions instead of in the billions like with OpenAI, Microsoft and Google. And let us not forget the Stargate plan of 500 billion USD, Donald Trump has launched.
The result of this news is that at one moment about 2 trillion dollars worth of stock value just evaporated, mainly from the Nasdaq. Most of it went away from Nvidia that lost 10 % of its value today, but also ASML lost 11 % today, and many others.
Cost efficiency
This is in my opinion actually a good thing. The narrative was that if you wanted to mean something in the AI world, you had to buy thousands of Nvidia chips, and throw a couple billion of USD at it to create enough compute that was capable of making a good AI model. There was no more search for cost efficiency, which is always a good thing for the economy. It was a game of more and more compute, no matter what the cost was, it would repay itself later.
This news means competition, and competition is always a good thing in a capitalist economy! For the Nvidia holders, it is a hard day to swallow, but Nvidia will have to become more cost efficient now. And eventually also that will pay off for the stock holders!
Have a great week, people!
Sincerely,
Pele23
Posted Using INLEO
I like the name of the startup, DeepSeek! China isn't that behind in the AI race, after all. Some experts have said they only played catch up in the last 6 months. Interesting weeks ahead for this sector.
yh oh.. NVDA,, :P well, leave it to the Chinese. (I am half) :)