DeepSeek is making Wall Street nervous about the AI spending boom: Here’s what we know

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DeepSeek is making Wall Street nervous about the AI spending boom: Here’s what we know

Yahoo Finance01-28

The AI frenzy that has reshaped the tech world and commanded the attention of Wall Street took an anxious turn Monday, after a Chinese upstart burst onto the scene, dazzling early users and sparking ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDeepSeek is making Wall Street nervous about the AI spending boom: Here’s what we know\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-01-28 01:18 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/deepseek-is-making-wall-street-nervous-about-the-ai-spending-boom-heres-what-we-know-171821309.html><strong>Yahoo Finance</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The AI frenzy that has reshaped the tech world and commanded the attention of Wall Street took an anxious turn Monday, after a Chinese upstart burst onto the scene, dazzling early users and sparking ...</p>\n\n<a href=\"https://finance.yahoo.com/news/deepseek-is-making-wall-street-nervous-about-the-ai-spending-boom-heres-what-we-know-171821309.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"META","symbol_name":"Meta Platforms, Inc.","start_time":0,"source_url":"https://finance.yahoo.com/news/deepseek-is-making-wall-street-nervous-about-the-ai-spending-boom-heres-what-we-know-171821309.html","article_id":"2506300582","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2506300582","pubTimestamp":1737998301,"columns":[],"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The AI frenzy that has reshaped the tech world and commanded the attention of Wall Street took an anxious turn Monday, after a Chinese upstart burst onto the scene, dazzling early users and sparking fears that US AI leadership is now under threat.It wasn’t just the Chinese model’s performance that rattled American investors and executives. 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Broadcom  dropped more than 12% Mon","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"META":"Meta Platforms, Inc.","NVDA":"英伟达","AMZN":"亚马逊","AVGO":"博通","AMD":"美国超微公司","GOOGL":"谷歌A","GOOG":"谷歌","MSFT":"微软"},"translate_title":"DeepSeek让华尔街对人工智能支出热潮感到紧张：以下是我们所知道的","themeId":"74d6f673084f3f5c2c7f8a132abc3f6a","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMD":0.9,"AMZN":0.9,"AVGO":0.9,"GOOG":0.9,"GOOGL":0.9,"META":0.9,"MSFT":0.9,"NVDA":0.9},"content_text":"The AI frenzy that has reshaped the tech world and commanded the attention of Wall Street took an anxious turn Monday, after a Chinese upstart burst onto the scene, dazzling early users and sparking fears that US AI leadership is now under threat.\nIt wasn’t just the Chinese model’s performance that rattled American investors and executives. The team behind DeepSeek, the AI model maker, claims that the technology uses cheaper chips and less data than the popular American AI assistants that have have captivated the tech elite and the broader public. \nA foreign competitor offering a rival product at a fraction of the cost has thrown into question the exorbitant spending of American tech giants. And it has poked holes in the idea of US tech supremacy and innovation, at the cost of many of Wall Street's most favored companies. \nIf the most expensive and sought-after AI chips aren't as vital as previously thought, an entire ecosystem built around massive AI investment could be in jeopardy. \nWhat is DeepSeek?\nDeepSeek is a Chinese startup that develops AI models. Its new R1 model, released in late January, has drawn swift praise for its performance benchmarks. It's impressive feats spurred a surge in usage. The DeepSeek app now ranks at the top for iPhone downloads in the US, just ahead of the OpenAI's ChatGPT. \"DeepSeek-R1 is now live and open source, rivaling OpenAI's Model,\" the company claims on its website.\"\n\n\n\n  The DeepSeek app now ranks at the top for iPhone downloads in the US (Photo Illustration by Justin Sullivan/Getty Images)\n \n\n  Justin Sullivan via Getty Images\n \n\nIs DeepSeek better than ChatGPT and other AI assistants?\nAmerican venture capitalist Marc Andreessen called the model “one of the most amazing and impressive breakthroughs I’ve ever seen.” Perhaps even more striking than DeepSeek's on-par performance is the cost of its development. DeepSeek claims that its breakthrough model cost less than $6 million to train. That's a staggeringly modest figure, considering OpenAI’s GPT model cost more than $100 million to train.\nIf Wall Street had already expressed some skepticism about the AI spending sprees of US tech companies, the existence of a cheaper alternative could amplify that criticism. The broader implication of DeepSeek's usefulness is that it may undermine the current development process of AI assistants. Why should investors accept huge spending increases from US tech giants when a cheaper alternative is already available? \nHow is the market reacting? \nThe American tech company at the heart of the AI growth story received one of the sharpest blows. Nvidia (NVDA) stock dropped more than than 12%. Other members of the \"Magnificent Seven\" who have made AI central to their growth stories also took some damage. Microsoft (MSFT), Alphabet (GOOGL,GOOG), and Amazon (AMZN) all fell 2% in morning trading. \nOther chip and infrastructure players also came under pressure. Broadcom (AVGO) dropped more than 12% Monday. Micron (MU) gave up nearly 10%, and Advanced Micro Devices (AMD) was down almost 5%.\nThe financial significance of prominent tech players weighed down the entire market. All three major indexes were in the red, with the tech-heavy Nasdaq Composite (^IXIC) sinking 2.2%.\nA slowdown in tech also highlighted how reliant the broader market is on Silicon Valley to continue to deliver growth. Any risk to tech's upward trajectory can have an outsize impact on Wall Street. \nHasn't the US limited the sale of advanced chips to China?\nThe global battle over tech supremacy has escalated in recent years, evolving into a key theme in foreign policy. Logistic shocks brought on by the Covid pandemic also underscored the importance of domestic supply chains and protecting access to key technology.\nThe US has attempted to maintain its edge in advanced tech by banning the export of certain goods in the interest of national security. Cutting edge GPU semiconductors, the kind used in building out advanced AI tools, are among the the technologies that American firms are restricted from selling to China. \nBut the early success of DeepSeek, which was purportedly developed for mere millions, indicates its engineers were able to essentially circumvent those restrictions by working with less advanced technology. The export controls were designed to prevent or slow China's AI progress. But in forcing Chinese technologists to work without the most cutting-edge tools, a foreign competitor managed to develop a far cheaper and perhaps more innovative model. \nHamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.\nClick here for the latest technology news that will impact the stock market\nRead the latest financial and business news from Yahoo Finance","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}