After DeepSeek Upended the Market, Is It Worth Investing in A.I.? – After the arrival of a less costly A.I. model from China, U.S. markets and academics are wrestling with the ultimate economic value of the technology.
After DeepSeek Upended the Market, Is It Worth Investing in A.I.? – After the arrival of a less costly A.I. model from China, U.S. markets and academics are wrestling with the ultimate economic value of the technology.
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From the article
>A.I. chatbots are fun, sometimes even useful and, until recently, endowed with the uncanny ability to mesmerize investors and fuel the U.S. stock market.
>But the excellent performance of a new, relatively cheap artificial intelligence engine from a Chinese start-up, [DeepSeek](https://www.nytimes.com/2025/01/27/technology/what-is-deepseek-china-ai.html), has perturbed the market and complicated the A.I. story.
>Investors are re-evaluating prominent companies swept up in A.I. fever, including [Nvidia](https://www.nytimes.com/2024/09/13/business/nvidia-stock-market-ai.html), [Meta](https://www.nytimes.com/2025/01/30/business/dealbook/meta-microsoft-ai-spending-deepseek.html), Alphabet, Microsoft, Amazon, Tesla and the private start-up OpenAI. The notion that full-blown superhuman intelligence is imminent has spurred the-sky-is-the-limit valuations, as well as concerns about the political and social [risks](https://www.nytimes.com/2023/05/30/technology/ai-threat-warning.html) posed by advanced intelligence.
>One immediate question: Is the main approach to developing A.I. in the United States — pouring billions of dollars into chips and infrastructure — worth the expenditure for all companies if similar results can be achieved far more cheaply? [DeepSeek’](https://www.nytimes.com/2025/01/28/technology/china-deepseek-ai-silicon-valley.html)s lower-cost innovations add urgency to bigger, longstanding financial questions: How much are artificial intelligence companies really worth, and what will the broader economic value of A.I. ultimately be?
All MAG 7 kept or increased capex so, until otherwise looks like they dont care at all about deepseek
DeepSeek requiring less money to train algorithms is great (if, and only if that’s found to be replicated by a third party). But the fact of the matter is that the bulk of the processing that data centres are used for is INFERENCE not TRAINING. So DeepSeek or not, it makes no difference to companies like NVDA.
The ultimate economic value of AI is nearly the entire current economy.
Why are they trying to evaluate the ultimate impact of AI as it currently exists? Its current state is not the end of advancements.
Data centers , hardware, power generation.
It’s not like this was the first inkling of no moat.
If your business model relies on no one leaking weights and your advantage is only a few months then it’s barely a business model.
Short answer I’d guess is: Yes. A lot of “AI” is just an extension of automation that already existed, companies using thought out approaches rather than the “THE NEW BUZZ WORD IS HERE TO REPLACE BLOCKCHAIN/NFTS, LET’S FUCKING GOOOOOO!”
Here’s how I look at it. My analogy could be really bad, but here it goes anyway.
When the combustion engine first came out, it was a huge success. Not many people had combustion motors, they were very expensive. Some of the first combustion motors by today’s standards were terrible. Shortly after, the Ford Motor Company came out with a more efficient way to produce the combustion engine. When Ford did this, the usage of combustion engines skyrocketed. Everyone started purchasing cars. We started putting combustion engines in everything (lawn mowers, cars, tractors, planes, weed-wackers, generators, boats, etc.). We started seeing bigger, better, faster, more efficient motors. Ford didn’t necessarily win the combustion motor race, but the efficiencies from Ford, increased the daily reliance that people have on combustion motors.
The point I’m trying to make is that efficiencies in producing combustion engines increased the adoption of combustion engines; the increase in adoption increased the demand for better combustion engines. I personally think that we are in the beginning phases of AI. Efficiencies in AI will increase adoption of AI, increased adoption will result in more reliance on AI
It was never worth investing in, did you watch the whole crypto, NFT now “A.I.” It’s all a fucking grift!
I wouldn’t invest in AI technology companies in particular. Technology always move on and what was difficult and expensive at some point will become common and cheap, especially when there’s a lot at stake. I’m running a slimmed-down version of DeepSeek R1 on my local machine (32B params, on a Mac M2 Max with 64Gb of memory). It’s amazing what it can do. I would expect more innovation coming from smaller players now, so maybe it’s better to invest in companies that will benefit the most from AI, instead of those building the technology.
Personally, I’m invested in index funds that replicate the NASDAQ and world-wide stock markets.
It is great we’ve now arrived at the era of AI vs AI trying to steal each other’s jobs.
This whole thing has really exposed how little most people understand this field, including most of the professional technology reporters. Andrej’s videos have been out there for a long time now guys, there’s really no excuse.
“Breaking news: a Chinese startup has figured out how to build an electric car for less – that’s the end of the EV market folks! Game over!”
There have been a lot of people “investing in AI” instead of people starting companies that use AI to do something new and interesting that impacts people’s day to day life.
Since DeepSeek is open source and you can run it on your computer, maybe they can do that more?
As a Chinese, I am tired of Westerners describing China as “cheap”.
Why can’t CloseAI be cheap? Because they are less efficient.
Isn’t improving efficiency to achieve almost the same results a disruptive innovation? If Westerners are offended, why don’t they reduce their model training costs by 95%?
AI is the future, and the future just became more accessible. All this means is that the industry will grow quicker, and at a lower cost. This means there will be less sacristy but also more demand because of the growing market.