Back to top

AI Winners Following the DeepSeek Disruption

Read MoreHide Full Article

Technology stocks tumbled last Monday, led by a 17% decline in NVIDIA (NVDA - Free Report) shares, as investors weighed the implications of a new AI model released by Chinese start-up DeepSeek. The model has raised concerns about the tens of billions of dollars being spent by U.S. tech giants.

However, some experts believe DeepSeek is using more NVIDIA chips than it has disclosed and is also spending significantly more than reported. Many suspect the company may have leveraged U.S. model outputs to enhance its own models.

Microsoft (MSFT - Free Report) and OpenAI are investigating whether DeepSeek used data from OpenAI’s models without authorization to train its own models via distillation.

While it is too early to assess the full implications, this development could ultimately benefit many companies, particularly AI users. If AI costs decline, leading to its commoditization, we could see more widespread adoption.

Investors have been evaluating potential winners and losers in the wake of DeepSeek’s emergence, leading to some rotation in the technology sector and broader markets.

Companies developing AI applications, as well as those integrating AI into their products and services to enhance productivity—such as software firms, banks, healthcare providers, and industrial companies—could be major beneficiaries as AI becomes more affordable and accessible.

To learn more about the iShares Expanded Tech-Software Sector ETF (IGV - Free Report) , Direxion NASDAQ-100 Equal Weighted Index Shares (QQQE - Free Report) , and Vanguard Value ETF (VTV - Free Report) , please watch the short video above.

Published in