Posted on 01/27/2025 6:27:08 AM PST by lasereye
Nasdaq futures plunged on Monday to lead a stock rout on Wall Street as a Chinese startup rattled faith in US leadership and profitability in AI, taking a hammer to Nvidia (NVDA) and other Big Tech stocks.
Contracts on the tech-heavy Nasdaq 100 (NQ=F) sank nearly 4%, while S&P 500 futures (ES=F) tumbled over 2%. Dow Jones Industrial Average futures (YM=F) fell 0.9%, or about 380 points, on the heels of a winning week for the major gauges.
Markets have been rattled by claims by China's DeepSeek that its AI assistant uses cheaper chips and less data than leading models, but performs equally well. A surge in DeepSeek's popularity has spurred a scramble by investors to reassess bets that AI demand-driven growth will keep fueling gains for stocks.
AI bellwether Nvidia's shares tumbled over 11% in pre-market trading, as chip-related names took a bruising. ASML lost 9%, while Arm (ARM), Broadcom (AVGO), and Micron Technology (MU) also got hammered.
Shares of Meta (META) and Microsoft (MSFT) both slid about 6% amid worries about megacaps' hefty investment in AI. Tesla (TSLA) and Amazon (AMZN) also lost ground as techs sold off across the board.
Big Tech earnings season kicks off this week, highlighted by results from Apple (AAPL), Tesla, Meta, and Microsoft. Eyes will be on guidance for future profit as DeepSeek casts doubt on prospects for revenue.
Investors started to flock to assets seen as safe as stocks plunged. The 10-year Treasury yield (^TNX) fell as much as 12 basis points to 4.50%, the lowest level in over a month, while haven currencies including the yen and the Swiss franc surged.
(Excerpt) Read more at finance.yahoo.com ...
That may or may not be the case here in the long run. Or runs.
I did some reading this morning...and from what I gathered from a few minutes of it, was Deepseek is able to execute AI processes similar to ChatGDP, but apparently they solved a big issue regarding energy consumption for AI workloads.
Its from the MSM....so take it for what its worth I guess...but it did spook Wallstreet.
It’s just like the Dot-Com boom in the 90s, and we all know how that ended.
Tech stocks will rebound long term.
AI can’t reason ,it’s crap
It will be an interesting ride
DeepSeek is said to perform as well as ChatGPT and other LLM’s, but needs far fewer processors/hardware to do it. The main thing is less hardware, which is very expensive. It needs less energy since it’s using less hardware. That’s also important.
Methinks Wall Street over hypes everything because the real money is made on the “churn”, i.e. charging fees on commodity transactions, not the commodities themselves, and the current AI hype has run its course.
I suspect AI comes down to computer-assisted decision-making assistance and computer-assisted information presentation.
The software will need to be more important than the computers.
Think policing, autism diagnosis, driving assistance, medical imaging analysis, disability determination, potential mate analysis, insurance rate determination, hiring assistance, etc.
At least one Chinese chip company, which quite well may be DeepSeek, I’m ignorant on the specifics, will meet Chinese military needs.
And even still, I heard China is building coal power plants like there is no tomorrow, largely to take on the AI energy workload.
They are making a BIG play in the AI realm for sure.
A Chinese missile might need to fly a thousand kilometers and pick out a worthy target.
The power available to do that is rather small.
Most people can't reason.
I expect AI to take a lot of low-level pencil-pushing jobs. Not a lot of real "thought" involved in those.
What I must be misunderstanding is DeepSeek is based on open source. What’s to stop the other AI’s to adopt its best features?
Consumer chips might be made to require lots of power to prevent Iran, Russia and North Korea from using them for many military purposes.
The Chinese will make their own chips.
Not saying that they aren't accurate, but we are dealing China and the CCP here.
And many of the new AI startups will eventually fail, and fall away, just as happened with the Dot.Com companies in the 90s.
“AI can’t reason ,it’s crap”
Can it be taught to pull a trigger?
WIKI
On 27 January 2025, Chinese startup DeepSeek’s AI Assistant has surpassed ChatGPT as the highest-rated free app on the U.S. App Store. It has sparked discussions about the effectiveness of U.S. export restrictions on advanced AI chips to China. The DeepSeek-V3 model, which uses Nvidia’s H800 chips, is gaining recognition for its competitive performance, challenging the global dominance of U.S. AI models.
https://en.wikipedia.org/wiki/DeepSeek
Note: AI technology is outside my expertise. I think there is considerable value in easily obtained, incomplete answers, especially considering how bad search engines have become.
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