Artificial Intelligence Revolution: DeepSeek's big language model shakes markets

One major innovation after another in the world of technology is having a profound impact on financial markets. Most recently, DeepSeek's new large language model (LLM) has created a huge ripple in the artificial intelligence ecosystem. Altınbaş University Faculty Member, AU INOVA Research Center Manager Assoc. Prof. Dr. Dicle Yurdakul pointed out that this development, which shook OpenAI, Nvidia and other giant technology companies, led to serious activity in the stock market. She stated that while Nvidia shares fell by 17%, the personal wealth of the company's CEO Jensen Huang decreased by 20.8 billion dollars in one day. Stating that the NASDAQ Composite Index lost 3.1%, Assoc. Prof. Yurdakul gave information about the reasons that triggered this collapse.

DeepSeek's LLM: Low cost, superior performance

Assoc. Prof. Dr. Yurdakul stated that the big language model offered by DeepSeek attracts attention with its advanced capabilities in natural language processing, generation and decision-making: “One of the biggest advantages of this model is its lower cost and scalability compared to its competitors. DeepSeek claims that it developed its artificial intelligence model with a budget of less than 6 million dollars. While this claim was initially met with skepticism, it may have been made possible by some strategic moves by DeepSeek.”

“Early backers made big gains”

Dicle Yurdakul said that although DeepSeek is still operating as a private company, rumors of an IPO have created great excitement among investors: “Early backers have already made huge gains from the company's rapidly increasing valuation. In the coming days, the unpredictability that DeepSeek brings with it will force investors to restructure their portfolios. This shift could also increase interest in smaller AI startups that have so far been ignored.”

Stating that DeepSeek founder Liang Wenfeng prevented a hardware shortage by purchasing a large amount of Nvidia GPUs in 2021, Yurdakul believes that this move gave the company a great competitive advantage as it took place before the US export restrictions on high-tech chips. Another important factor, according to Yurdakul, is that DeepSeek published its model as open source. “This strategy has made the company a transparent and accessible AI producer, while enabling continuous improvement of the model with contributions from the global tech community. In addition, the new model's high performance with less hardware is a response to concerns about reducing costs and energy consumption in the AI industry.”

How are tech giants affected?

Yurdakul pointed out that the stocks of AI-focused companies, which benefited a lot from the golden age of AI before the field, also fluctuated significantly with Deep Seek's entry into the market. “Companies that depend on existing LLM infrastructure are seen as more vulnerable, while companies that adopt DeepSeek's model or develop similar technologies are considered potential winners,” he said, noting that investors have started to reconsider their decisions and put companies that can adapt to this new competitive environment on their radar.

“OpenAI may reevaluate its pricing and operational processes”

Reminding that the GPT series has been the industry leader in large language model technology for a long time, Yurdakul emphasized that DeepSeek's model has superior performance despite requiring less processing power. He also predicted that offering this technology for free for the time being may force OpenAI to reevaluate its pricing and operational processes.

“Nvidia has seen a big drop in prices.”

Yurdakul assessed that DeepSeek's model could have an impact that could reduce the dependence on high-end GPUs. This has had a negative impact on Nvidia's long-term growth prospects, causing a big drop in its stock price. While the company remains the leader in AI hardware, the rise of high-performance models with low hardware requirements raises questions about its future market dominance.

What is the situation at Google and Amazon?

Dicle Yurdakul from Altinbas University noted that companies heavily dependent on integrated AI solutions such as Microsoft, Google and Amazon are also affected by this shift. Yurdakul added the following to her assessments: “Google may have to compete with DeepSeek's smarter and personalized alternatives in search engine and advertising technologies. Amazon, on the other hand, has to develop more efficient solutions in AI-powered cloud services.”

What does the future hold for DeepSeek?

Yurdakul said that DeepSeek's entry into the market has shaken the long-established balances of major technology companies and put investors into an uncertain process. Finally, Yurdakul stated that while the stocks of companies that have previously invested heavily in artificial intelligence have been negatively affected by this development, companies that produce solutions similar to DeepSeek's model may be the new favorite of investors. According to Yurdakul, DeepSeek's low-cost and high-performance model has the potential to reshape not only the technology world but also global financial markets. “As big tech giants are forced to adapt to the new dynamics of artificial intelligence, investors are trying to redefine winners and losers.”