The DeepSeek Paradox
The last week of January was packed with significant events, as the financial market awaited the "Super Wednesday," when central banks would announce their decisions and some of the largest tech companies, known as the Mag 7, would release their earnings. However, the focus shifted entirely when the Chinese company DeepSeek launched a chatbot based on an artificial intelligence (AI) model that was far cheaper to train than those of its competitors.
The market reacted with sharp declines on Monday, particularly for companies linked to the AI sector, such as energy suppliers for data centers and NVIDIA itself, which saw significant drops in value. However, doubts soon arose about DeepSeek's supposed revolutionary breakthrough. Elon Musk suggested that the company might be using NVIDIA chips obtained illegally, while OpenAI and Microsoft accused DeepSeek of violating terms of use by training its model based on others' technologies. David Sacks, a former AI advisor in the Trump administration, reinforced these suspicions, citing "strong evidence" of intellectual property misuse.
Despite the controversies, experts like Yann LeCun from Meta acknowledged that DeepSeek made significant strides in the efficiency of training language models (LLMs). This progress cannot be ignored, especially in a market increasingly dependent on AI. Morgan Stanley estimates that investments in AI will reach $650 billion by 2026, a figure that gains even more relevance following the impact caused by DeepSeek.
Innovation creates winners and losers. Among the losers are OpenAI, whose thesis that AI advancements require massive investments has been shaken, and NVIDIA, which saw its market value drop sharply. However, there is debate over whether NVIDIA truly loses from this. The reduction in AI model training costs could paradoxically increase demand for chips, a phenomenon known as the "Jevons Paradox." This could benefit NVIDIA in the long term, although the short-term impact remains uncertain.
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