Squawk on the Street SOTS 2nd Hour: Breaking down the sell-off – and just what is DeepSeek? 1/27/25
Jan 27, 2025
The podcast delves into a stock market sell-off triggered by news about DeepSeek, a new AI model from China. Major tech companies like NVIDIA face significant pressure amidst a reevaluation of U.S. tech dominance. The discussion includes potential impacts on semiconductor and energy sectors, along with insights on the ongoing AI race. The hosts also touch on market dynamics influenced by rising mortgage rates and political tensions, analyzing investment strategies as tech giants approach crucial earnings reports.
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DeepSeek's Impact
- DeepSeek's surprisingly low development cost raises concerns about U.S. tech dominance in AI.
- This has led to a reevaluation of the AI market and the potential for overinvestment in the sector.
Investor Confidence Shaken
- Investors previously trusted big tech's AI spending, believing future profits justified current costs.
- DeepSeek challenges this trust, raising concerns about overspending and the durability of AI investments.
Market Differentiation
- The market is differentiating between AI hardware providers and other tech companies.
- Power suppliers face higher pressure due to concerns about overinvestment in data center infrastructure.