DeepSeek’s AI progress has likely caused some market concern about growth in demand for computing power, Jefferies research analysts wrote in a note.
Sentiment for AI-related semiconductor stocks was likely affected by news that the Chinese AI company developed an open-source large language model that matches the performance of OpenAI’s flagship model but using a fraction of the computing power, the analysts said.
That could refocus the industry on investment returns as AI model improvements have come at a high cost and monetization has yet to justify the cost of investment, they added. Another consequence could be Trump relaxing the U.S.’s AI chip export controls on Chinese firms since the restrictions are forcing China to innovate faster as it chases LLM efficiency, they added.
Read More: Dow, S&P 500, Nasdaq Set to Open Down; China DeepSeek AI Fears; Nvidia,
