The situation surrounding Chinese startup DeepSeek continues to attract interest in the stock market, especially in the artificial intelligence sector, where investor expectations and fears are shifting.
DeepSeek and Its Market Impact
CNBC's Jim Cramer stated that DeepSeek no longer poses a threat to leaders in the AI industry. After DeepSeek unveiled its AI model, investors began to worry that the Chinese company could outpace tech giants like Nvidia and AMD. However, Cramer noted that investors who previously sold off shares in these companies are now returning.
Wall Street’s Reaction to DeepSeek News
Cramer highlighted that the rebound in stock prices after the panic triggered by DeepSeek suggests that concerns over the dominance of the Chinese startup were exaggerated. "Now, looking back, it's clear that these stocks never should’ve been sold in the first place because DeepSeek simply wasn’t that meaningful," Cramer said.
Export Control and DeepSeek's Dependence
An unnamed senior U.S. State Department official indicated that DeepSeek is using Southeast Asian shell companies to obtain high-end Nvidia chips, suggesting the firm relies on U.S. technology despite its rapidly evolving AI capabilities. Additionally, the Biden administration banned the export of certain chips to China in December 2022.
The situation with DeepSeek underscored significant trends in the AI industry, demonstrating that investors and the market as a whole are recovering from the initial shock associated with a new player on the field. It also serves as a reminder of the risks associated with panic reactions to innovations.
