Chinese AI firm DeepSeek disrupts U.S. tech giants, Alibaba outperforms

From Nasdaq: 2025-01-29 12:13:00

Chinese AI firm DeepSeek caused a stir in the industry with its low-cost models, impacting U.S. tech giants like NVIDIA, Microsoft, and Alphabet. Alibaba’s Qwen 2.5 model outperformed DeepSeek, Meta, and OpenAI. DeepSeek’s models offer efficient performance at low costs, with recent allegations of IP rights violation by OpenAI.

Spending on AI by U.S. tech giants remains robust, with billions expected to be spent on model development and infrastructure. OpenAI has reportedly spent $3 billion on training models in 2024. META plans to invest between $60-65 billion in AI in 2025. China has a $8.2 billion AI investment fund to boost innovation.

DeepSeek’s rise has put pressure on U.S. tech giants like Microsoft, Meta Platforms, and Alphabet. These companies are leveraging AI and machine learning to enhance their offerings. Microsoft’s collaboration with OpenAI has been beneficial. Meta Platforms and Alphabet are also using AI to engage users and attract clients.

NVIDIA, despite facing losses due to DeepSeek’s disruption, is expected to benefit from its portfolio. The company’s GPUs, including Hopper and Ampere architectures, are in high demand. With a Zacks Rank #2, NVIDIA offers a buying opportunity for growth-oriented investors. Experts have identified 7 best stocks for the next 30 days, including Microsoft, NVIDIA, Alphabet, Alibaba, and Meta Platforms.

For more information and free stock analysis reports, visit Zacks.com. The views and opinions expressed in the article are those of the author and do not necessarily reflect those of Nasdaq, Inc.



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