Justin R. LesterFounder & AI-Ministry Strategist, TheoXTech · Pastor. Professor. AI Strategist.

Why DeepSeek Made the Stock Market Crash

31 Jan 2025 · 1 min

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A short explainer arguing that the market’s strong negative reaction to DeepSeek was an overreaction: Nvidia briefly lost roughly $600B in market value and the Nasdaq fell ~3%, but the speaker contends cheaper AI (via DeepSeek) will raise inference demand for GPUs and drive long-term growth rather than an AI-driven market apocalypse. The piece contrasts short-term investor fear with longer-term adoption benefits.

Chapters

So are you wondering why Deepseek made Wall street crash or made everybody freak out? Didn't really crash. Made everybody freak out. Nvidia lost 600 billion in value. Nasdaq dropped 3%. Investors hit the eject button? Should they have? Here's why the market freaked out. Nvidia dominates the AI chip market. So if AI training gets cheaper, companies might buy fewer of their GPUs. That's bad for Nvidia but good for AI adoption. Is this all a big overreaction? Yes. Deep Sleep needs a lot of GPUs for INF, for inference, aka running AI, not just training it. Now this could actually increase the demand for Nvidia's chips so it feels like more of a market correction than AI apocalypse. Cheaper AI means more companies can build build with it instead of expanding the industry and not killing it. So a short term fear, long term growth. Deep Seek did shake the news up, but it's not AI Sputnik.