“The idea around DeepSeek’s success was simply doing more with less, developing clever and more efficient techniques that cut the costs of training their own models,” says Janasiewicz. “More concerning to the market was the fact that DeepSeek built technology rivalling the capabilities of the US leaders despite spending a fraction of the money and not having access to cutting-edge chips.”
DeepSeek’s explosive entry last week is not a death knell for incumbent artificial intelligence (AI) models. Rather, evidence points to continued spend into the sector, not easing; and profitability should jump across the board for companies as AI becomes engrained and resulting efficiencies increase, says Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions.
DeepSeek’s powerful R1 model, reportedly developed at a fraction of the cost of its competitors, called into question the massive capex plans that have been announced by many of the big tech firms across the US.
