The development of China's AI model DeepSeek has caused turmoil in the tech market, affecting major players except for Meta, whose stocks rose amidst the crisis.
Impact of DeepSeek on the Tech Market
The DeepSeek R1 model from Chinese developers posed a significant challenge to the industry, triggering investor panic and a sharp drop in the stock value of major companies. Nvidia experienced the biggest hit, with losses reaching up to $600 billion in a single trading day. The model's cost-effective efficiency propelled it to the top of the US Apple App Store, surpassing alternatives like ChatGPT.
Meta's Success Amid Crisis
Meta Platforms Inc.'s stocks defied the trend, showing a 2.6% growth on Friday, gaining more than 16% over 10 days. This rally is Meta's longest since September 2015, reflecting investors' confidence in the company's AI strategy. Unlike other tech giants like Nvidia and Microsoft, Meta sustained its position by leveraging AI to enhance targeted advertising.
Future of Advertising Tech with AI
Meta's 10-day streak of success began on January 15, 2025, amidst the stock market upheaval triggered by DeepSeek. The company continues to invest in AI infrastructure despite competition. Plans include a $65 billion budget for AI projects in 2025. Meta’s CFO highlights that the company does not rely on selling AI models, with its revenue largely stemming from advertising, enhanced by AI for improved targeting. Investors are optimistic that AI will increase profitability through more precise ad targeting.
Despite the market instability caused by the DeepSeek model, Meta Platforms Inc. continues to succeed due to its AI strategy and strong positioning in targeted advertising.
