The recent news that the latest open source release on GitHub of Chinese-based DeepSeek (equiv. to ChatGPT, OpenAI, etc.) is supposedly 95% cheaper than current US solutions using high-end nVidia chips.
Others are saying it gives a x30 performance improvement, taking much less time to teach it and less power to run it.
The stock market (S&P, Tech) is panicking as there certainly does seem to be some truth to the claims.
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| S&P 500 (2025-01-27) |
nVidia seem to be greatly affected today but even companies like Microsoft have suffered for some strange reason.
My take is that this is a software innovation which is available to everyone for free. As such, it can run on less powerful nVidia GPUs or run even faster on the high-power H100 GPUs. If run on H100s, it will run faster and train faster.
This means the AI tech will become cheaper and so means it makes AI affordable to smaller companies now. So it is good news for everyone, especially companies selling AI solutions.
nVidia may suffer in sales of the top-end H100 for a while (which were limited in supply anyway), but may now sell more of it's other GPUs which are not in such limited supply.
Overall, the AI market will explode if the reported results actually stand up to examination (or even if only half true!). To me, in the medium-term, DeepSeek s/w gives a massive boost to AI and Robotics companies.
So today, I have bought £1k more of the Tech ETF IITU (18% in NVidia) whilst it is cheap!
IUCM has not dropped too much today, but if I had some spare cash, I would have bought more of that too!
EQQQ is also a good buy this morning (8% in NVidia).
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