Flash in the pan or paradigm shift for #AI? $XLU fell 2.3%, $NDX shed 3%, and $NVDA lost nearly $600bn—more than the entire market cap of #Netflix. #DeepSeek’s cost-efficient model suggests less spending and computational power may suffice for AI development, challenging the splurge of US #BigTech. This could mean reduced investment in #Chips and lower #PowerDemand.
However, this may have been an overreaction against sky-high valuations. We’re likely far from peak spending, as rising competition and the nascent nature of the technology will still demand more investments and computing power. Moreover, #Trump has pledged US AI dominance, while rolling back prior restrictions.