The earnings season for major tech companies has ended, revealing an unexpected trend: the heads of leading IT giants do not view the Chinese AI startup DeepSeek as a threat. This previously little-known project developed a breakthrough AI model at a record-low cost, using less powerful chips than its competitors. Yet, contrary to investor fears, industry leaders see DeepSeek as an inspiration and a source of new opportunities rather than a disruptive challenge.
AI Investments Continue to Grow
The wave of tech stock growth triggered by earnings reports is gradually subsiding. Almost all members of the American tech “Magnificent Seven” have released their fourth-quarter 2024 results, except for Nvidia, whose report is scheduled for February 26, 2025. A key theme of this earnings season has been the surge in AI investments: Amazon, Google, Meta, Microsoft, and Apple are significantly increasing their AI development budgets.
Amazon’s report showed mixed results. While EPS and revenue exceeded Wall Street forecasts, an uncertain outlook disappointed investors, causing a decline in the company’s stock. An Evercore analyst described this as a correction of expectations rather than a sign of fundamental issues.
A surprising development came from DeepSeek, a Chinese AI startup that introduced a cutting-edge AI model at the end of January 2025. The project’s training costs amounted to just $5.6 million, and it relied on less powerful chips than those typically used by industry leaders. This sparked concern in the stock market, as investors feared that cheaper computing could reduce the dependency of AI development on high-performance GPUs. Consequently, Nvidia and other semiconductor manufacturers saw a sharp decline in their stock prices.
Despite initial concerns that tech giants might scale back AI investments after recognizing DeepSeek’s potential, financial reports and executive statements proved otherwise. AI remains a strategic priority, with companies continuing to allocate substantial resources to its advancement. As one analyst noted, the numbers speak for themselves—interest in AI is not waning.
DeepSeek’s Influence on the Industry
Meta CEO Mark Zuckerberg acknowledged that the company is still “digesting” DeepSeek R1’s developments. He noted that the Chinese AI model incorporates innovative solutions that Meta intends to study further. Additionally, its open-source nature allows for broader industry adaptation.
Amazon CEO Andy Jassy expressed admiration for some of DeepSeek’s training methods, emphasizing that AI presents a “once-in-a-lifetime business opportunity.” Alphabet CEO Sundar Pichai also praised the DeepSeek team, though he stated that Google does not see it as a serious competitor, given the strength of its own Gemini AI models.
Apple CEO Tim Cook welcomed innovations that improve efficiency, while analysts suggest that DeepSeek R1 could play a key role in the future of mobile AI. Its approach enables AI models to run directly on smartphones, reducing reliance on powerful cloud servers. Microsoft CEO Satya Nadella compared DeepSeek’s advancements to traditional computing evolution, confirming that the company is closely monitoring the project as a promising innovation.
While most major tech companies have acknowledged DeepSeek’s significance, Tesla and xAI CEO Elon Musk has remained silent. Though actively involved in AI development, his public stance on DeepSeek remains ambiguous. Additionally, Musk has been preoccupied with his role in the newly established US Department of Government Effectiveness (DOGE), an initiative that has sparked controversy among the public and human rights groups.
Independent AI experts recognize DeepSeek’s potential impact, adds NIX Solutions. Evident Insights CEO Alexandra Mousavizadeh described it as a breakthrough in large language models (LLMs), dramatically reducing generative AI costs. She believes the startup’s open-source approach will lead to further industry-wide adoption and innovation.
DeepSeek’s influence is only beginning to unfold, and its role in shaping AI’s future will be closely watched. We’ll keep you updated as more developments emerge.