In addition, DeepSeek also dampens sentiment around TSMC’s earlier guidance of a mid-40s five-year AI revenue CAGR.
US-traded American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC) tumbled 13% after Chinese artificial intelligence (AI) firm DeepSeek released its open-source reasoning model R1, which achieves capabilities on par with that of OpenAI and Google at a fraction of the latter’s costs.
DeepSeek’s model exacerbated concerns as to whether adding more computation power is the best way to improve models, and whether AI spending by the likes of Amazon and Microsoft is “durable”, says Morningstar Equity Research analyst Phelix Lee.
