With the stock market dominated by US tech companies focused on AI, is DeepSeek's competitor to OpenAI about to brings things crashing down? The post Is DeepSeek about to cause a stock market crash? appeared first on The Motley Fool UK.

I think we’re about to get a crash in 5 hours folks

The companies known as the Magnificent Seven make up over 20% of the global stock market. And a lot of this is based on their perceived advantage when it comes to artificial intelligence (AI).

The big US tech firms hold all the aces when it comes to cash and computing power. But DeepSeek – a Chinese AI lab – seems to be showing this isn’t the advantage investors once thought it was.

DeepSeek doesn’t have access to the most advanced chips from Nvidia (NASDAQ:NVDA). Despite this, it has built a reasoning model that is outperforming its US counterparts – at a fraction of the cost.

Investors might be wondering about how seriously to take this. But Microsoft (NASDAQ:MSFT) CEO Satya Nadella is treating DeepSeek as the real deal at the World Economic Forum in Davos:

“It’s super impressive how effectively they’ve built a compute-efficient, open-source model. Developments like DeepSeek’s should be taken very seriously.”

Whatever happens with share prices, I think investors should take one thing away from the emergence of DeepSeek. When it comes to AI, competitive advantages just aren’t as robust as they might initially look.

  • merthyr1831English
    20·
    3 days ago

    UK or US? I was about to offer above asking but discovered a cool feature of post-2008 mortgage lending where banks might only lend what they think a house is worth, so I’m just hoping landlords don’t have extra cash laying around to cover that and put in better offers.

    Doesn’t help that the one I offered for is being considered by a house builder and not the owner (they part exchanged for a newbuild property) so they’re not likely to have the anti-landlord sentiment that you mentioned.

    • ProfessorOwl_PhD [any]@hexbear.netEnglish
      12·
      3 days ago

      UK. We did the same, the bank told us we had to knock 5k off our offer to get the mortgage, but luckily the owner still accepted.
      Unfortunately they generally do have the extra cash on hand, because it’s not petty landlords buying houses, it’s conglomerates trying to monopolise the market.