Date first published: 12/02/2025
Key sectors: all
Key risks: business risks; business disruptions; economic risks
Risk development
On 20 January, Chinese AI company DeepSeek shocked markets when it released DeepSeek-R1 and a paper detailing that training DeepSeek-V3 required less than US$6m worth of computing power from low-powered Nvidia H800 chips. The emergence of the low-cost AI model raised concerns among global investors, leading to a mass sell-off of tech stocks. This resulted in a US$593bln loss in market value for US tech firm Nvidia, marking the largest single-day loss for any Wall Street company, and a 3.1 per cent decline in the tech-heavy Nasdaq. DeepSeek’s release challenged the belief that AI’s future rested on massive energy consumption, surging electricity demand and reliance on nuclear power, which had driven a series of multi-million-dollar investments by US firms into complex and expensive AI models and massive AI-related infrastructure.
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