GuShiio.com Wen | Wave Wave, author| Xiao Lu Yu, Editor | Yang Xuran
DeepSeek’s impact on the capital market obviously did not end with the Spring Festival.
After the Spring Festival, the DeepSeek concept stock among A-shares rose more than 46%, driving the stock prices of multiple concept sectors such as cloud computing, operating systems, and Huawei Hongmeng to rise.
The short selling pressure in the Hong Kong stock market has also been alleviated. The overall increase has been obvious for some time. The Hang Seng Technology Index continues to rise, driving the Hang Seng Index back to the 20,000 mark.
Analysts generally believe that this wave of Hong Kong stocks is mainly driven by AI technology breakthroughs and the return of funds.
In addition to the secondary market, which has obvious reactions, the primary market is also secretly brewing a surge. Various speculations about DeepSeek’s future have not ended because Ali denied it plans to invest US$1 billion. Whether Kimi, Doubao and other competitors can keep up with the competition has also become a question.
Far away in the U.S. market, many AI companies, represented by Nvidia, have recovered from the first wave of DeepSeek’s impact, and references such as collapse have become less and less.
Compared with China’s AI, the United States ‘own strategic contraction, tariffs, institutional abolition and other issues are also important reasons that impact the U.S. stock market, and even the more direct ones.
01 Vibration
DeepSeek’s explosion was inseparable from the foil of domestic counterparts, the breaking of defenses by opponents, and the sharp drop in the stock prices of U.S. stocks such as Nvidia. These dramatic scenes made the development of the whole matter eye-catching.
There is even a paragraph saying that DeepSeek’s parent company Magic Square Quantification only needs to short Nvidia every time before the AI model is upgraded, which can perfectly solve the current problem of difficulty in commercial profit for AI.
Nvidia Stock Price Performance (September 2024 to Present)
The change in Nvidia’s share price is not entirely due to the impact of DeepSeek. The shock in the U.S. stock index is more due to the impact of a series of policies implemented after Trump took office.
Nvidia ‘s monopoly on selling shovels has not been banned by Deepseek. Although the development cost of AI models has been greatly reduced, referring to the development history of industries such as the Internet, it can be seen that the price of computing power has dropped significantly, which is itself an inevitable trend of industry development.
Without DeepSeek, other companies and AI models would emerge, making the threshold for computing power no longer unattainable. Moreover, Nvidia itself is also the core force in promoting the reduction of computing power costs, and has previously pursued this goal through algorithm optimization on the CUDA platform.
It can be said that the market has certain expectations for a decline in computing power prices, and even believes that this will drive the overall demand for computing power to increase. For Nvidia, this is obviously not bad news.
According to financial reports, U.S. technology giants will definitely increase capital expenditures on AI this year. Google is expected to invest US$75 billion, Amazon will invest US$100 billion, and Meta will invest US$60 – 65 billion. Although DeepSeek may lead to overall cost savings and spending slowdown in the AI industry, it is far from a collapse.
In the end, these funds for AI infrastructure construction will directly or indirectly increase the demand for Nvidia’s high-performance computing chips, which is the driving force for the rebound of Nvidia’s share price.
But the emergence of Deepseek has made the entire market more rational, and the financial performance of large U.S. technology companies is also in a mixed state.
Wall Street expects the seven sisters to grow their profits by approximately 22% year-on-year in the fourth quarter of 2024, the lowest growth rate since 2023, and the fourth consecutive quarter of slowing growth.
The performance of technology giants fell short of market expectations: Tesla’s car deliveries and profit margins fell in 2024, global revenue for the iPhone2024Q4 fell slightly by 0.9% year-on-year, and the growth of Amazon, Microsoft and Alphabet’s cloud businesses fell short of expectations.
Coupled with the huge investment that has to be made in AI, the market will inevitably have various concerns. Moreover, Trump’s 100-day new policy will also take the market time to digest.
At present, the financial performance of U.S. stock technology giants can still support their stock prices. However, once technological hegemony encounters substantial challenges, the bubble will easily be burst. Recently, financial institutions such as Goldman Sachs and Bank of America have also warned about the risks of U.S. stocks.
02 Game
The bull market in U.S. stocks is inseparable from the hegemony of the U.S. dollar and technology monopoly. U.S. stocks are regarded as one of the important foundations of their country’s economy. Therefore, technology companies in other countries will more or less be targeted.
Trump’s statement on February 7 seems to have abandoned hostility: DeepSeek, a big artificial intelligence model of China, will not pose a threat to U.S. national security. On the contrary, the United States can benefit from DeepSeek’s innovation, but the actual situation is obviously far from that simple.
AI is a new productivity tool that can be deeply bound to various industries. If the United States can establish an absolute lead and complete monopoly in this field, it will be a high probability event to use AI taxes to continue to harvest the world. By then, this AI tax will be much more severe than the apple tax.
Faced with the challenges brought by DeepSeek, the United States gave its technology companies enough time in the first phase to go online, research and turn them into their own use. At present, technology giants such as Microsoft, Nvidia, Amazon, Intel, and AMD have announced the launch of the DeepSeek model.
Amazon integrated DeepSeek into Bedrock and SageMaker, and Microsoft included it into Azure AI Foundry. Users originally had to pay for using these platforms, which is equivalent to DeepSeek contributing revenue to these platforms.
It is worth noting that Trump changed his stance on DeepSeek just after his meeting with Huang Renxun.
After American technology companies have thoroughly studied DeepSeek’s technology and can launch large-scale AI models with more cost and performance advantages, their attitude towards China AI such as DeepSeek will change.
Moreover, in the high-end chip field where the United States still has an advantage, the increase in sanctions against China has never stopped, and may even become more stringent due to the emergence of DeepSeek.
On February 9, it was reported that TSMC had officially notified its customers in the mainland of China that all products related to processes of 16/14 nm and below must be packaged at a packaging factory approved by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). This rule applies to all chips, regardless of their application field.
Previously, the U.S. government also ordered to find out whether Singapore had resold Nvidia chips to DeepSeek.
David Sachs, head of AI affairs in the Trump administration and former chief operating officer of PayPal, once said on a blog show that he plans to require TSMC to implant performance attenuation programs on export chips to reduce the computing power of chips every month after leaving specific geographical areas. 8% rdquo;
These measures are obviously aimed at preventing China companies from obtaining high-performance chips, thus dragging down the research and development speed and upgrade process of China’s AI technology.
They used universal rhetoric such as data security and national security to ask all stakeholders to choose sides. At present, Italy, Australia, South Korea, and Taiwan are already on the front line of banning DeepSeek.
03 Expectations
Liang Wenfeng, founder of DeepSeek, recently received an invitation to an artificial intelligence conference held in Paris, France, so many domestic netizens are worried about his personal safety. After all, the confrontation of interests is cruel, and there are many lessons learned from the past.
The surging tide of the world is not something that a certain artificial intelligence application can control, but as important roles in it, Liang Wenfeng and DeepSeek have begun to shoulder heavy responsibilities of the times.
Then, whether to tie the interests and destiny of everyone has become a question worth considering.
The low-key Liang Wenfeng rarely makes public appearances
DeepSeek was born in the hands of a group of geeks born in the 1980s and 1990s. It has a simple background and is one of the few teams in the quantitative circle that does not have an overseas background. The wealth freedom that has been achieved makes them more willing to purely pursue technological breakthroughs and generously open source their results to developers around the world than to gain short-term benefits.
But that was before DeepSeek exploded. Today’s situation is that all consumers, developers, and investors want to use DeepSeek to make profits.
More importantly, people all hope that this successful platform can develop and operate smoothly, rather than fighting AI NATO ‘s attack alone or even collapse. Only in this way can people enjoy more stable services from China AI instead of always being prompted to try again later because the server is busy.
With limited functions, there are so many people who want to use it normally that teaching users to locally deploy DeepSeek has become a money-making business.
Localized deployment refers to installing DeepSeek’s AI model into a local computer without relying on network or cloud services. It also supports individuals to make some customized modifications to DeepSeek according to their needs.
Compared with individuals, enterprises are a more active force trying to locally deploy DeepSeek.
Since companies have deployed DeepSeek based on their own profit considerations, they naturally hope that DeepSeek will comply with normal business operation logic.At the very least, DeepSeek must be able to cover the increase in operating and maintenance costs caused by the widespread application of AI models, so as to ensure the sustainability of API services.
The current 45-day preferential price experience period for the DeepSeek-V3 API service has ended, and will be adjusted to a new price starting from February 9, which is 0.5 yuan (cache hits)/2 yuan (cache misses) per million input tokens, and 8 yuan per million output tokens. This is still a very cheap price compared to OpenAI.
Moreover, OpenAI has just finalized a new financing amount of US$40 billion with Japan’s Softbank Group, and the pre-investment valuation has reached US$260 billion.
Foreign media reports Softbank will invest in OpenAI
It can be said that the amount of funds is still a key factor in AI competition, whether the funds come from commercial fees or equity financing. Although Magic Square is very rich, there is still a huge gap compared to this amount of capital.
The larger the scale of capital intervention, the greater the appetite for annexing more markets in the future. What is certain is that the Stargate project will not be completely stalled just because of the emergence of DeepSeek. Instead, it will step up its efforts to invite capital from Japan, the Middle East and other places to join the project and use equity to bundle up real interest camps to help the U.S. AI services sweep these regions in the future. Lay the foundation for the market.
In this case, it may not be a good thing for DeepSeek to not accept outside investment at all.
The recent market rumors that Ali will invest US$1 billion in DeepSeek are obviously not only to hype Alibaba’s share price, but also include the market’s enthusiastic expectation of Liang Wenfeng accepting financing, whether the potential investor is Ali or higher-profile state-owned assets.
