What Investors Need to Know About DeepSeek

Who is DeepSeek?

DeepSeek is a Chinese AI company making waves in the market with its high-performance yet cost-effective large language model (LLM). With strong backing from investment funds and an open-source strategy, DeepSeek has quickly become a formidable competitor to OpenAI, Google DeepMind, and Anthropic.

Competitive Advantages & Technology

DeepSeek stands out due to:

• DeepSeek-R1 model, which matches the quality of GPT-4o but costs only $6 million, significantly lower than GPT-4’s $100 million.

• Implementation of Mixture of Experts (MoE) to optimize computing resources and reduce operational costs.

• Rapid growth: DeepSeek-R1 quickly became the No.1 free AI application on the U.S. App Store, surpassing ChatGPT.

Market Impact

• Impact on Nvidia: Following DeepSeek’s launch, Nvidia’s stock dropped by 18% due to concerns over declining AI chip demand.

• Threat to OpenAI & Google: If DeepSeek maintains its growth trajectory, the AI market will experience a significant shift.

• Geopolitical competition: The U.S. may impose sanctions, limiting DeepSeek’s access to Western markets.

Opportunities & Risks for Investors

✅ Opportunities:

• Breakthrough technology with rapid user growth.

• Strong financial backing from major Chinese investment funds.

• Potential for IPO and international market expansion.

❌ Risks:

• No clear revenue model yet.

• Risk of being banned in the U.S. and Europe.

• Fierce competition from AI giants.

Is DeepSeek a Worthwhile Investment?

DeepSeek is a highly promising AI startup, but significant risks remain. If it goes public, it could be a high-potential AI stock. Investors should closely monitor Nvidia’s response, OpenAI’s competition, and U.S. government policies before investing.

Will DeepSeek become a tech unicorn or just a passing phenomenon? The answer is still unfolding.

Written by: Thanh Truc - Marketing at ALTAS CORP

Date: 29.01.2025