Jordan Hart
Big Tech is reeling from the seemingly sudden popularity of a big new Chinese AI name, but Apple could benefit from a disruption to its competitors' efforts.
DeepSeek, a Chinese artificial intelligence startup, released the AI model R1 on January 20. Many in the tech industry believe DeepSeek's large language models could threaten some of the biggest AI players, including Google, Microsoft, and OpenAI.
DeepSeek has spooked markets because it appears to deliver models that are as effective as US versions but much cheaper to produce because they run on less powerful chips.
That undercuts Google, OpenAI, and others' ability to charge premium prices to access the best of their AI models. The Netherlands-based chipmaker ASML's shares fell by 7%, while the AI chip giant Nvidia's stock dropped by more than 17% on Monday.
Apple, however, is in a relatively good position, tech analysts told Business Insider. Its stock rose on Monday, while competitors Alphabet and Microsoft traded down.
"Apple would be a beneficiary if the cost of AI training declined," Gene Munster, the managing partner at Deepwater Asset Management, said.
One reason Apple stands to gain from cheaper AI training is that it "rightly focuses on how to integrate AI as a product, rather than building the most cutting-edge models," William Kerwin, a tech analyst at Morningstar, said.
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