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DeepSeek's new artificial intelligence (AI) model has rattled the market earlier this week as investors weigh what the breakthrough means for the AI landscape and Big Tech companies spending billions on the tech.
D.A. Davidson research analyst Alex Platt joins Seana Smith and Brad Smith on Morning Brief to break down how the DeepSeek news could be pivotal for the AI market.
Platt compares DeepSeek's work to the late Roger Bannister, who ran the first sub-four-minute mile: "Prior to Roger Bannister doing [it], it was thought as impossible to go under four minutes. He breaks it, and right afterward you see a bunch of runners be able to run now sub four minutes. DeepSeek did something very similar to the market."
"The prevailing narrative in the market up until about a week ago was that in order to compete at the frontier model game, you needed to be an OpenAI, an Anthropic, a [DeepMind], a Meta (META), an xAI [with] tens of billions of dollars of excess capital in order to build a model that powerful."
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"DeepSeek showed us you don't need that much money. They could do it with $5.5 million for training. They could deliver at a much lower cost," Platt explains."And the best part is they really gave the rest of the space their playbook, how to replicate what they've done, how to make a model that is computationally efficient, and what this really does is it'll increase competition in the space."
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Naomi Buchanan.