Podcast Notes: DeepSeek R2 - The Tech Stock "Atom Bomb"
Overview
- DeepSeek R2 could heavily impact tech stocks when released (April or May 2025)
- Could threaten OpenAI, Anthropic, and major tech companies
- US tech market already showing weakness (Tesla down 50%, NVIDIA declining)
Cost Claims
- DeepSeek R2 claims to be 40 times cheaper than competitors
- Suggests AI may not be as profitable as initially thought
- Could trigger a "race to zero" in AI pricing
NVIDIA Concerns
- NVIDIA's high stock price depends on GPU shortage continuing
- If DeepSeek can use cheaper, older chips efficiently, threatens NVIDIA's model
- Ironically, US chip bans may have forced Chinese companies to innovate more efficiently
The Cloud Computing Comparison
- AI could follow cloud computing's path (AWS → Azure → Google → Oracle)
- Becoming a commodity with shrinking profit margins
- Basic AI services could keep getting cheaper ($20/month now, likely lower soon)
Open Source Advantage
- Like Linux vs Windows, open source AI could dominate
- Most databases and programming languages are now open source
- Closed systems may restrict innovation
Global AI Landscape
- Growing distrust of US tech companies globally
- Concerns about data privacy and government surveillance
- Countries might develop their own AI ecosystems
- EU could lead in privacy-focused AI regulation
AI Reality Check
- LLMs are "sophisticated pattern matching," not true intelligence
- Compare to self-checkout: automation helps but humans still needed
- AI will be a tool that changes work, not a replacement for humans
Investment Impact
- Tech stocks could lose significant value in next 2-6 months
- Chip makers might see reduced demand
- Investment could shift from AI hardware to integration companies or other sectors
Conclusion
- DeepSeek R2 could trigger "cascading failure" in big tech
- More focus on local, decentralized AI solutions
- Human-in-the-loop approach likely to prevail
- Global tech landscape could look very different in 10 years
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