DeepSeek announced recently a chat bot similar to ChatGPT that matches ChatGPT's performance.
DeepSeek's chat bot however cost 6 million USD to produce, while ChatGPT's 4.0 last version chat bot cost 100 million USD to create.
On this piece of news over the weekend yesterday, Monday, the 27th of January NVIDIA, the largest GPU manufacturer for artificial intelligence, AI tumbled 17 % for Monday, other AI chips manufacturers' stock prices and market capitalization like Broadcom fell 16 % or even more. Energy producers. the market capitalization of which grew a lot in the last rolling year on expectations they will have much new business feeding energy to the artificial intelligence, AI computation data centers like GE Vernova fell also by around 20 % yesterday.
In short, there seems to be a huge downward reassessment on how much will it cost to produce artificial intelligence, AI computing. The Chinese with DeepSeek, if the news are true 100 % have shown that producing artificial intelligence, AI run applications is only 6 % of the cost or many times lower than previously thought.
NVIDA Inc, the poster child of the artificial intelligence, AI felt this reassessment most acutely, since companies like Meta, Microsoft, Apple, Amazon, Alphabet were lining up until last Friday to purchase NVIDA GPUs for artificial intelligence, AI at very high prices ensuring a close to 40 % net profit margin for NVIDIA.
Now the market seems to have reassessed downwards the profitability of NVIDIA, Broadcom and other artificial intelligence, AI chips producing companies, driving down their future Price/Earnings ratios and this lowering significantly their current value.
NVIDIA, Broadcom could fall more than 30 % from their recent peaks, according to Wolfteam Ltd.'s projections and estimates, before staging a recovery. Yes NVIDIA's market capitalization could recover and even grow in 1 year. Why? Simply because DeepSeek feat has shown that artificial intelligence, AI computation is significantly cheaper, not that AI computing total demand slow. On the contrary, new, cheaper artificial intelligence, AI computer chips that produce cutting edge artificial intelligence, AI will broaden the market giving corporations, small and medium enterprises, startups and ultimately consumers with personal computers access to the most advanced artificial intelligence, AI computational capabilities.
A huge beneficiary of the current situation is Apple, in Wolfteam Ltd.'s view. The broadening of artificial intelligence, AI applications computational capability to corporations, small and medium enterprises, startups and ultimately consumers will drive more demand for Macintosh computers, iPhones, iPads on which one will possibly be able to do on premise artificial intelligence, AI, applications high grade computing.
Samsung is another potential beneficiary with its broad palette of mobile phones, computers and tablets.
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