Britney Nguyen
Big Tech’s multi-billion dollar spending on artificial intelligence will be under investor scrutiny this week — even more so after China’s DeepSeek sent shockwaves through Wall Street and Silicon Valley with a cheap yet competitive AI model.
Ahead of earnings results from Microsoft, Meta, and Apple, the AI-driven stock rally lost $1 trillion in value after the Hangzhou-based AI startup demonstrated AI reasoning models on par with OpenAI and Anthropic. Last week’s release of DeepSeek-R1 sparked a global sell-off of tech stocks, with Nasdaq, Dow Jones Industrial Average, and S&P500 futures all falling Monday morning. Nvidia (NVDA) stock plunged 17%, wiping out nearly $600 billion in value — a record loss for a U.S. company.
Investors were spooked by DeepSeek, which in December released DeepSeek-V3, a model it said cost just $5.6 million to train and develop on Nvidia’s reduced-capability H800 chips.
According to the technical paper, DeepSeek said it used a cluster of just under 2,050 graphics processing units (GPUs) from Nvidia for training — much less than the tens of thousands of chips U.S. firms are using to train similarly-sized models. Meta (META), for example, used 16,000 of Nvidia’s more powerful H100s to train its Llama 3 405B model.
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