DeepSeek rout was a one-time phenomenon? Wall Street investors have a different perspective; here's all about it

The sudden panic over Chinese AI company DeepSeek caused a massive sell-off in US tech stocks this week, particularly hitting Nvidia, whose shares lost $500 billion in value, as per reports. Here's what analysts are sceptical about.

The trigger was DeepSeek’s breakthrough AI platform, reportedly created on a shoestring budget, which seemed to threaten the dominance of US tech giants, as per reports.

Is China borrowing US technology?

But while the markets seem to have overreacted, some analysts aren’t so sure that DeepSeek’s success is as organic as it’s considered to be, reported New York Post. DeepSeek was founded by hedge fund trader Liang Wenfeng, who reportedly “outsmarted” US tech by developing a cheaper AI model, as per repprts. However, many in the tech world are sceptical.


Analysts question if this Could be another case of China borrowing US technology, rather than creating something entirely new.

Are there any secrets?

The tech sector has long been concerned about intellectual property and the trade secrets companies have to share to enter the Chinese market. During US president Donald Trump's first term, he raised alarms over these issues. Now, with DeepSeek's sudden rise, these concerns have resurfaced.

Despite these worries, tech analyst Dan Ives remains unconvinced by DeepSeek's “rags-to-riches” story. While he doesn’t dispute the quality of the AI, he questions how it could be built with only a $6 million investment, reported New York Post.

According to Wall Street analysts, the big question now is whether DeepSeek has the potential to disrupt US tech or if the initial hype was just a temporary panic. Investors watch closely as Nvidia’s stock rebounds, with some expecting the worst may be over for US tech companies if the DeepSeek tale doesn’t hold up.

FAQs

Why did DeepSeek shake up the tech market?
DeepSeek’s new AI platform, created with a low budget has concerned investors because it could challenge big players like Nvidia, which caused a huge dip in stock prices, as per reports.

Are experts doubtful about DeepSeek's success?
Yes, many analysts are doubtful if DeepSeek’s rise is really all its own, or if it’s based on borrowed US technology.