When Bonnie Chan Yiting was in Davos six weeks ago for the World Economic Forum’s (WEF) annual confab, the Swiss ski resort was abuzz with a groundbreaking app that a little-known artificial intelligence (AI) start-up had released half a world away in China.
Hangzhou-based DeepSeek rolled out its namesake app on January 20, providing its low-cost large language model (LLM) for free on the same day that the WEF got under way.
Within two days, DeepSeek had overtaken OpenAI’s ChatGPT as the most downloaded freeware app on the iOS app store in the US. On Wall Street and elsewhere, DeepSeek sparked a re-rating of Chinese stocks, unleashing a torrent of money into the world’s second-largest capital market.
“In the last two weeks, the world [has been] waking up to [the realisation] that the valuation that they’ve been attaching to the top bucket of US stocks over the last two years may need some revisiting, especially with the arrival of DeepSeek,” Chan, the CEO of Hong Kong Stock Exchanges and Clearing, said at a conference in Kuala Lumpur on February 17, recounting the buzz in Davos.
Nvidia, the dominant maker of the chips that power AI applications, lost US$600 billion of value on January 27 when its stock plunged 17 per cent, as investors realised that LLMs could be developed at a fraction of the cost in terms of high-powered computing. The stock has retreated by another 4 per cent since then, reinforcing the reassessment of US technology stocks.
“As soon as you realise that the same [leading edge] technology [such as in AI] can be created with a lot less cost, people start wondering whether the valuation allocated to that stock is a reasonable one,” Chan said. “Hopefully with that review, [investors] are going to realise the attractiveness of stocks in this region.”