back to article US AI shares battered, bruised, and holding after yesterday's DeepSeek beating

US tech shares, rattled yesterday by the release of a supposedly more efficient AI model by Chinese outfit DeepSeek, appear to have staunched the bleeding, but not recovered.  After losing enough market cap on January 27 to set a new record, Nvidia has pick up by a few percent, though not enough to erase the losses. The same …

  1. Doctor Syntax Silver badge

    "After all, if China can do it on the cheap in the face of sanctions"

    Not in the face of sanctions but because of them. If you force someone to go their own way you shouldn't be surprised if they do. It's amazing how legislators never work out how the populus is going to respond in reality instead of in theory.

    1. BartyFartsLast Silver badge

      Exactly, necessity is the mother of invention and if you cut off access then people develop their own alternatives

      1. David 132 Silver badge
        Boffin

        Whoever imposed the sanctions clearly hadn't read Asimov's Foundation. Wherein, if I recall - it's been years - the exiled scientists, forced to work with very limited resources, made ultra-miniaturized power cells and other devices, to the wonderment of another civilisation. Who, rich in resources, had power cells that filled an entire room rather than fit in a hand.

        1. Anonymous Coward
          Anonymous Coward

          Yep, see Ukrainian drone manufacture...

    2. beast666 Silver badge

      All sanctions on Russia should be revoked.

      1. Casca Silver badge

        You cant help yourself being a moron cant you?

    3. TReko Silver badge

      Sanctions have a long history of failure, from South Africa developing a first world armaments industry in the 1980's to Iran and North Korea now supplying war supplies to Russia in the Ukraine war.

      The inference (not the training) for Deepseek's models is apparently done on Huawei GPU chips.

      Sanctions are worse than just failures, they backfire.

      1. HuBo Silver badge
        Go

        Oh yes, the best way to incapacitate an adversary is indeed not sanctions at all, but to baste it in extreme artery clogging convenience and diabetic sedentarity, with an outsized supply of yummy inexpensive goodies, app-delivered straight to the home (like fiber)! In no time flat, their circumference thickly exceeds the mechanical requirements for intercourse, and the population dwindles naturally, without launching a single conventional weapon, as lunching and lounging take their place instead.

        It's not just very efficient, but also quite enjoyable (if one's furniture can withstand it)!

        1. amanfromMars 1 Silver badge

          Take a Look into the Mirror and what do you See? A Willowy Stick or a Blundering Blob?

          Oh yes, the best way to incapacitate an adversary is indeed not sanctions at all, but to baste it in extreme artery clogging convenience and diabetic sedentarity, with an outsized supply of yummy inexpensive goodies, app-delivered straight to the home (like fiber)! In no time flat, their circumference thickly exceeds the mechanical requirements for intercourse, and the population dwindles naturally, without launching a single conventional weapon, as lunching and lounging take their place instead.

          It's not just very efficient, but also quite enjoyable (if one's furniture can withstand it)! .... HuBo

          Ah yes, HuBo, the Titanic Billy Bunter Root Route ...... the epic disarming reward for dismal administrative failure and spectacular executive hubris.

          Have an upvote for an amusing reality check, which for one to deny is prevalent and gravely to be regarded, simply delivers more of the same sort of self-destructive remotely controlled grief and hopeless despair.

  2. Paul Crawford Silver badge

    Perhaps it is really showing the world there is less to AI than huge costs would suggest, and some market reality is due to come home to roost?

    1. Anonymous Coward
      Anonymous Coward

      It shows that brute forcing is not efficient. Surprise!

      A ten year old can fully understand speech and text. Just think of how much speech, text,band energy said ten year old has consumed.

      American AI needs more speech and text than the combined population of a mid sized country consume in their live times to reach that level of language command. Using more energy than such country uses.

      Something tells me that could be done more efficiently.

      1. Anonymous Coward
        Anonymous Coward

        The way AI works reflects the way its creators think...

    2. Like a badger

      "Perhaps it is really showing the world there is less to AI than huge costs would suggest, and some market reality is due to come home to roost?"

      Yes and no. Tech stock prices have been divorced from the their underlying commercial performance for a very long time, and the quest for AI is throwing money away. However, it's interesting to see how few voices are asking whether DeepSeek really has been built on the shoestring financial and technical model claimed. Think about the outcome here: At face value China gains technical credibility, the US loses it; Anybody shorting the big tech stocks has just made a few billion; the effectiveness of tech sanctions has just been "proven" to be minimal; many people are now happily using Chinese AI software that we already know is censored, and therefore we can fairly assume it will be hoovering up all and any data that it can.

      It's quite surprising that the Reg of all places (and the commentariat) haven't displayed a lot more healthy scepticism. Maybe DeepSeek is indeed a miracle of technical frugality, but since it comes from a multi-billion dollar Chinese entity there's obviously state influence. Can you think of any other instance where you'd trust Chinese "facts", and more than you'd trust no name or never-heard-of branded goods from China?

    3. Groo The Wanderer - A Canuck

      This generation of "AI" was never anything more than a snake oil bubble on a grand scale. The pustule has a long way to go before it is fully drained and can start healing.

  3. Mentat74
    Facepalm

    How long before...

    Hair furor imposes tariffs on A.I. ?

  4. sarusa Silver badge
    Devil

    Awwwww

    So sorry to hear ChatGPT's lost its job to AI.

  5. Oh Homer
    Terminator

    Oh joy

    An even cheaper way to make humanity redundant.

    1. Strahd Ivarius Silver badge
      Coat

      Re: Oh joy

      It needs to be very cheap to make all Chinese redundant, there are so many of them.

      Now waiting to see the Indian version...

  6. Dostoevsky Bronze badge

    Too early...

    ...to say, "Ding, dong, the witch is dead?" I'll be glad when the world outside El Reg realizes stochastic cow manure generators aren't profitable, or even useful.

    1. Anonymous Coward
      Anonymous Coward

      Re: Too early...

      Sorry, but applications like translation of text and speech and writing aids that produce good text are already changing the world.

      Students all over the world already recognized that writing "good" prose and correct grammar has become as easy as using correct orthography. That won't go away.

      The same is happening in visual arts.

      Remember that Gutenberg went bankrupt from inventing the printing press. Commercial failure often follows technical breakthroughs.

      Those companies at the cradle of AI will probably all crash and burn. Others still will get rich.

      Just like the current internet billionaires did not contribute to its initial development.

      1. Anonymous Coward
        Anonymous Coward

        Re: Too early...

        One of the most useful feature I got with AI is the ability to take notes and summarize when I got an only meeting.

        And it makes me laugh each time I get a notification asking me what language is the speaker is using when it is one of my European colleague with a strong accent...

      2. Chet Mannly

        Re: Too early...

        "Students all over the world already recognized that writing "good" prose and correct grammar has become as easy as using correct orthography."

        Those students haven't learned enything except gto get a computer to do their work for them.

        And I'd hardly call what GPT produces as good prose. It's grammar is hit and miss as well...

        1. O'Reg Inalsin

          Re: Too early...

          I think there's a difference between try to use it to generate text from scratch or hints, and using it to fix spelling, grammar, and point out awkward phrasing. For example it can catch those stupid spell checker mistakes.

          1. druck Silver badge

            Re: Too early...

            O'Really? How many 'r's does that have again?

    2. Like a badger

      Re: Too early...

      "I'll be glad when the world outside El Reg realizes stochastic cow manure generators aren't profitable, or even useful"

      No, but the way governments measure growth means that business investment (no matter how foolhardy) contributes directly to economic growth.

      GDP = Business investment + consumer spending + government spending + net exports

      So all this AI and DC spending (plus the energy sector investments to support it) directly bolster GDP growth. Obviously that's bollocks: Using just two examples, in current prices, HS2 and Hinkley Point C have together contributed about £160bn to UK GDP, hands up who feels £260 better off from these two as-yet unproductive assets? But in terms of what governments measure and tell us, it's a simple reality that simply spending money, even if borrowed and lacking a valid business case still boosts GDP.

  7. Pascal Monett Silver badge

    "will obviously deliver much better models"

    Yes, of course.

    But you don't need $500 billion any more, now do you ?

    Think harder.

    1. Anonymous Coward
      Anonymous Coward

      Re: "will obviously deliver much better models"

      "Think harder."

      PHB: No, develop an AI to think harder.

    2. Strahd Ivarius Silver badge
      Facepalm

      Re: "will obviously deliver much better models"

      Of course not, the need is now for $1000 billion because you need to be able to automatically translate location names between the MAGA version and the international one by detecting the user's location, nationality and political leaning

  8. Jason Hindle Silver badge

    Moving the wall...

    I agree that what Nvidia makes will still be in demand. Last year, the talk was of LLM development hitting a plateau of diminishing returns, or a wall. The compute cost of o1 seemed to bear that out... DeepSeek potentially moves that wall into the distance. And it's FOSS. Anyone can take it, study its guts and improve it. I think it also points to OpenAI in particular being a massive fake it 'til you make it scam.

    1. Sorry that handle is already taken. Silver badge

      Re: Moving the wall...

      Last year, the talk was of LLM development hitting a plateau of diminishing returns, or a wall.
      They've already absorbed all of the available un-polluted training data, whether with or without permission, so they've already reached a maximum. Or in the very best case a local one.

  9. harrys Bronze badge

    luvin it :)

    hahahaha

    could happen to a nicer bunch of hubristic up their own arses silicon valley american tossers :)

    even if been given a bloody nose by another bunch of american cloned chinese hedge fund tossers!

    nice no bullshit 2 min pragmatic clarification from a UK centric angle .... https://www.youtube.com/watch?v=gY4Z-9QlZ64&t=1048s

  10. TrickyRicky
    Joke

    Parallel processing

    How do we know that Deepseek isn't just millions of Chinese just copy-pasting Baidu search results into the answer? Or even a carefully censored front end to someone else's AI?

  11. Anonymous Coward
    Anonymous Coward

    Honeymoon is over

    The monopoly honeymoon of software and hardware manufacturers is over and will end up in big nightmare. First was Microsoft with it windows11 BS hardware requirements then OpenAi and company marriage with NVidia not that all is in pending cord when some efficient start up brings the game up. Have this been western company it would be all praises but because is Chinese there is a lot of rhetoric around. Even OpenAilI claiming DeepSeek is using its training models. The bottom line here is the AIPath is wrong from the get go as it needs infinite data and energy to get meger and not dependable results. But as long is business for all our eaters everyone is silent and never even questions the basic underlying working of it. Even the Nobel price father of AI acknowledged that what makes the generative AI is actually a probablistitic firing that also may trigger AI going off the rails. And for the general AI the tools presented to it are completely wrong as true general AI should be given the simplest axioms of basic maths and natural science and let it inferr all the mathematical and physical laws humans did come across centuries. Not the other way around to give it all the data or knowledge and ask it to try all combinations of existing formulations to see with what output result or protein or compound comes back. That is not intelligence but automation and people are being deceived and q lot of people will be hurt with their lifetime savings.

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