DeepSeek, a new Chinese AI firm, has emerged as a major competitor to leading U.S. AI technologies, boasting performance akin to leading chatbots at a significantly lower cost. Founded in 2023, it has quickly gained traction with its mobile app topping charts in major markets worldwide. However, Wall Street analysts have mixed feelings about its impact on the industry, with some fearing it could undermine major investments by tech giants while others question the technological demands necessary for its models. The discussion underscores potential shifts in AI competitiveness and market entry barriers.
DeepSeek's power implications for AI training punctures some of the capex euphoria which followed major commitments from Stargate and Meta last week. With DeepSeek delivering performance comparable to GPT-4o for a fraction of the computing power, there are potential negative implications for the builders, as pressure on AI players to justify ever increasing capex plans could ultimately lead to a lower trajectory for data center revenue and profit growth.
If smaller models can work well, it is potentially positive for smartphone. We are bearish on AI smartphone as AI has gained no traction with consumers. More hardware upgrade (adv pkg+fast DRAM) is needed to run bigger models on the phone, which will raise costs.
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