AI stocks are dropping because DeepSeek’s new model was built and run at a fraction of typical costs. The fear is that cheaper AI spells doom for established players. That logic is flawed. Look to Say’s Law: supply can create its own demand. Cheaper, more accessible AI will spark a wave of innovation, fueling broader adoption and, ultimately, higher demand for computing resources. Markets might react negatively now, but in the long run, cost-efficient AI is crucial for the industry’s growth. DeepSeek may be the catalyst that propels AI forward rather than undercutting it.
This is similar to how Ford (a century back) dreamt of putting a car for every house hold - sparked the growth of automobiles. Personal computer innovation - another example.
Nvidia is just Cisco selling the hardware to the world , enabling the AI infrastructure. You need to look @ how much Cisco had as a share of US economy at the height of Dot-com bubble and how much Nvidia had before the selloff. Cisco didnt magically disappear after dotcom bubble popped up, it just stopped having insane P/E ratios.
John Kutay Exactly. This is a great development that should in fact spark chip demand.
AI | Value Engineer | Pricing & GTM Strategy | Deep Conversation Advocate
1moappreciate this perspective. everyone is trying to figure out how this advancement positions them (hopefully) even better than before. makes me think in a reverse way of sorts when you are at a startup with a new idea and a bigger player enters the space. you can freak out and say "well we are screwed" or you can look at it as a positive and say "look at what they will be able to do in the marketplace as far as marketing/enablement spend to get folks up-to-speed on what is possible"