Wall Street experienced a significant downturn on Monday, driven by concerns that a Chinese competitor, DeepSeek, poses a threat to U.S. companies dominating the artificial intelligence (AI) sector. DeepSeek claims to offer comparable AI capabilities at a fraction of the cost, raising anxieties about its potential impact on the AI supply chain.
U.S. President Donald Trump on Tuesday talked up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence , through a new partnership formed by OpenAI, Oracle and SoftBank. The new entity, Stargate, will start building out data centers and the electricity generation needed for further development of fast-evolving AI in Texas, according to the White House. Anne Gaviola has this story and more in Business Matters for Wednesday Jan. 22, 2025.
“It remains to be seen if DeepSeek found a way to work around these chip restrictions rules and what chips they ultimately used as there will be many skeptics around this issue given the information is coming from China,” according to Dan Ives, an analyst with Wedbush Securities.In Amsterdam, Dutch chip supplier ASML slid 8.5%. In Tokyo, Japan’s Softbank Group Corp. lost 8.
It’s a sharp turnaround for the AI winners, which had soared in recent years on hopes that all the investment pouring into the industry would lead to a possible remaking of the global economy. Other Big Tech companies had also joined in the frenzy, and their stock prices had benefited too. It was just on Friday that Meta Platforms CEO Mark Zuckerberg was saying he expects to invest up to $65 billion this year, while talking up a massive data center it would build in Manhattan.
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