Starting from the basis... What is DeepSeek?
DeepSeek is a Chinese startup company that has been able to come up with AI models that give industry giants a run for their money, mainly ChatGPT, but at cheaper costs. News of its release had triggered a chain reaction since investors were doubting the business models of big global companies were sustainable and were shifting their investments toward cheaper alternatives.
The Impact on Nvidia and the Crypto AI Industry
Nvidia, the leading manufacturer of graphics chips used to train AI models and more, has suffered more direct consequences from this situation.
The stock recorded a daily loss of more than 13% with a loss of close to $500 billion in a single session.
Nvidia was, until a few days ago, the world's biggest company with capitalization of more than $3,500 billion dollars, while for the time being, it is in the fourth position with a market cap of less than $2,000 billion dollars.
As often happens, Nvidia drags along for better or worse the entire Crypto AI sector where we find NEAR, ICP, RENDER, FET, GRT and VIRTUAL which have recorded losses between 8% and 17%.
Opportunity or risk for investors?
The DeepSeek company has raised an important question about investments in artificial intelligence. JPMorgan, for example, hypothesizes that the current fervor for investments in AI could be overestimated, creating a speculative bubble.
While others argue that such technologies need powerful hardware, like GPUs. Despite the usual well-known instability of this area, Marcin Kazmierczak, COO at Redstone, suggests weighing carefully the peculiarities of projects related to Crypto AI, underlining promising synergies to be created between different artificial intelligence agents:.
Instability and uncertainty that is fed, among other things, by the decision on US interest rates, scheduled for Wednesday 29/01, and by the period of publication of the earnings of big tech companies such as Microsoft, Meta and Tesla (end of January for the fourth quarter of the previous year).
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