Nvidia, Meta react as DeepSeek disrupts AI and sends stocks tumbling
Jan 28, 2025 - businessinsider.com
DeepSeek, a Chinese AI startup founded by Liang Wenfeng, launched its large language model R1, quickly surpassing ChatGPT in downloads on Apple's Top Free Apps chart. This development led to a sharp sell-off in US tech stocks, particularly affecting Nvidia, whose stock dropped over 17% due to concerns about DeepSeek's ability to achieve competitive results with cheaper hardware. Other tech giants like Microsoft and Alphabet also saw declines. Despite the market reaction, industry leaders expressed admiration for DeepSeek's innovation, with Microsoft's Satya Nadella highlighting the potential for increased AI adoption and Intel's former CEO Pat Gelsinger suggesting that cheaper AI models could expand the market.
Marc Andreessen praised DeepSeek's R1 as a significant breakthrough, while Meta's Yann LeCun emphasized the role of open-source models in AI advancements. Mark Zuckerberg announced Meta's plans to release a new version of its AI model Llama and invest heavily in AI infrastructure. Nvidia acknowledged DeepSeek's achievement but noted the need for significant GPU resources for AI inference. Overall, DeepSeek's rise has sparked both concern and admiration within the tech industry, highlighting the competitive dynamics in the AI market.
Key takeaways:
DeepSeek's launch of its R1 model led to a significant decline in US tech stocks, particularly affecting Nvidia.
Tech leaders like Satya Nadella and Marc Andreessen have praised DeepSeek's advancements, highlighting its potential impact on the AI market.
Pat Gelsinger argued that DeepSeek's cheaper AI models could expand the AI market, contrary to the negative market reaction.
Meta, led by Mark Zuckerberg, is investing heavily in AI, promising a new state-of-the-art model and significant capital expenditure.
