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NAB Morning Call

China’s AI success spooks US investors

Jan 27, 2025
Rodrigo Catril, NAB’s market strategist, sheds light on how China's rapid advancements in AI are causing US investors to rethink their strategies. He discusses the implications of this competition for American tech companies, particularly in the semiconductor sector. The conversation dives into market shifts, with a notable move toward bonds and safe-haven currencies like the yen. Catril also highlights the potential political ramifications and how these changes might affect future negotiations ahead of the upcoming election.
17:20

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Podcast summary created with Snipd AI

Quick takeaways

  • China's advanced AI, exemplified by DeepSeek's success, poses significant challenges to the valuation and competitive edge of American tech giants.
  • The evolving US-China relations, influenced by Trump's policies on tariffs, could complicate the economic landscape amidst rising tensions over technological competition.

Deep dives

The Rising Threat of AI from China

The emergence of China's AI engine, DeepSeek, raises concerns about US exceptionalism in technology. Its success, demonstrated by its status as the most downloaded free app in the US, has led investors to question the high valuations of American companies like Nvidia. DeepSeek offers advanced AI capabilities at a fraction of the cost, which challenges the competitive edge traditionally held by US tech giants. This situation requires a reassessment of the market, as companies that were once leaders in AI technology now face significant pressure from more cost-effective alternatives.

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