DeepSeek AI Rattles US Tech Industry's Dominance (Full Transcript)

Speaker 1: The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser focused on competing to win. DeepSeek, a Chinese AI startup, has suddenly emerged as a threat to the dominance the U.S. tech and AI industry enjoyed over the last few years. Global investors and analysts predict DeepSeek could have a significant impact on the fortunes of U.S. tech stocks and thereby the global markets. In particular, DeepSeek challenges major American companies like NVIDIA, OpenAI, Google, and Meta, all of which have dominated the AI space for years. Now, to understand the potential disruption DeepSeek brings, let's break this down in this video. NVIDIA, an American tech giant, has made its fortune manufacturing cutting-edge GPUs the hardware backbone of artificial intelligence. Over the last few years, NVIDIA's dominance has fueled the explosion of AI, with its stock soaring to unimaginable heights. But now, enter DeepSeek. This ambitious Chinese startup has developed AI models that cost up to 30 times less to run. Yes, you heard that right. They're focused on making their AI systems not only cheaper but also usable on older hardware, a game-changer for researchers, startups, and even governments working on tight budgets. Some analysts predict DeepSeek's rapid rise as a potential black swan event for the worldwide stock market, causing significant disruption to U.S. tech stocks. Well, last week, DeepSeek introduced a new generation of AI models that directly compete with the ones developed by established U.S. companies. What distinguishes DeepSeek is its emphasis on developing more efficient and cost-effective AI models, particularly the hardware. Now, DeepSeek's models reportedly cost 30 times less to run on older hardware compared to traditional U.S.-based AI systems. DeepSeek's lower-cost models could be a huge advantage, especially for companies and researchers looking for cheaper alternatives to high-cost AI systems. DeepSeek's approach is making waves, also because it is about more than just simply efficient. It is also about making AI open-source, which means that others can use and improve their work for free. And DeepSeek's open-source methodology distinguishes it from competitors such as OpenAI and other U.S. businesses that normally charge for access to their AI technologies. Now, what is the big concern? The big concern is that if DeepSeek continues to develop its models and acquire popularity, it will cause a big disruption in the business. NVIDIA's stock, for example, has skyrocketed as artificial intelligence has emerged as a key driver of growth in the technology industry. However, if DeepSeek's cheaper AI models gain traction, demand for NVIDIA's pricey hardware may plummet, lowering its stock price and market value. DeepSeek has also teamed with AMD, which is a competitor to NVIDIA, to boost its position in the AI sector. AMD's expertise in high-performance processing might help DeepSeek create even more powerful and efficient AI models, putting them on par with U.S.-based enterprises. Now, this collaboration may enable DeepSeek to scale its technologies more quickly, raising questions about how quickly the U.S. IT titans may have to respond. So is this a Chinese tech giant's takeover? Well, Chinese tech companies like ByteDance and DeepSeek are gaining ground in AI, intensifying competition for U.S. companies. This trend is part of a larger trend of Chinese companies challenging U.S. dominance in the tech sector, raising concerns about the future threat to the U.S.'s AI market. For now, DeepSeek's innovative AI techniques and open-source commitment are gaining attention from industry leaders, potentially disrupting the global AI market balance and prompting U.S. companies to rethink their strategies. The U.S. tech market is experiencing nervousness with U.S. tech stocks, particularly in AI, experiencing volatility. The Nasdaq Composite futures are down over 2% on Monday due to growing concerns over DeepSeek's impact on AI technology, which could potentially reduce the value of leading U.S. AI stocks. DeepSeek's potential impact could potentially lead to significant losses for Nvidia stock and other Nasdaq-listed stocks if the threat is perceived as real. The Nasdaq 100 is trading at 27 estimated forward earnings compared with its three-year average of 24 times, while Nvidia is at 33 times. DeepSeek's rise in the U.S. tech industry is causing concern for investors and industry leaders as AI competition intensifies and its impact on U.S. tech stocks is expected to be significant.