DeepSeek ‘punctures’ AI leaders’ spending plans, and what analysts are saying

DeepSeek challenges AI giants with efficient, low-cost models causing mixed analyst reactions.

: DeepSeek, a Chinese AI firm, claims its breakthrough models rival leading offerings at lower costs. Founded in 2023 by Liang Wenfeng, the company releases a popular mobile app topping charts globally. Analysts give mixed reactions; Jefferies warns of spending impact, while Goldman Sachs highlights competition shifts.

DeepSeek, founded in 2023 by Liang Wenfeng, claims to have developed AI models that offer performance comparable to leading U.S. firms but at significantly lower costs. This has caught the attention of market analysts, with the company's mobile app gaining popularity in major markets like the U.S., UK, and China.

Wall Street reactions are mixed, with Jefferies highlighting potential challenges DeepSeek's efficiency poses to high spending plans by companies like Meta and Microsoft. Meanwhile, Citi questions the feasibility of DeepSeek's achievements without advanced GPUs, while Bernstein believes the panic is exaggerated but sees a need for innovations like this in AI.

Goldman Sachs sees the potential for DeepSeek's advancements to level the playing field between major tech giants and startups, given the lower barriers to entry. This shift could lead to increased competition and further global expansion for Chinese AI players. Analysts across various firms continue to debate the implications of DeepSeek's methodologies and long-term impacts on the AI and tech sectors.

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