A Chinese AI company called DeepSeek is claiming it can run its AI models using cheaper and simpler computer chips. This could change the game for AI technology, making it less expensive and slowing down big investments in fancy chips by tech companies.
Currently, major cloud companies spend around $50 billion every three months on advanced AI technology. If DeepSeek’s claims are true, it could force a change in how AI is developed, making it more affordable to use.
This shift could be good news for many tech companies looking to make more money. While spending on AI is still high, a new wave of buyers for personal computers and laptops could keep demand strong.
If more people use DeepSeek’s affordable options, it may lead to faster innovation in the chip industry. If DeepSeek’s technology works as well as Nvidia’s, it might threaten Nvidia’s leading position in AI.
However, DeepSeek is still not widely accepted. Experts say its technology is better suited for using AI (inference) rather than creating AI programs (training), where traditional computer methods are still important. Also, worries about safety and politics could prevent DeepSeek from becoming popular in Western countries.
Fitch Ratings is being cautious about the future of chip companies, predicting only moderate sales growth for 2025. If big investments in AI slow down, it could hurt companies like Nvidia that depend on strong demand for their chips.
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