TL;DR
The DeepSeek “miracle” was a mirage. Their $1.6 billion hardware spend, revealed by SemiAnalysis, debunks the myth of their cheap, revolutionary AI.
Story
Another day, another AI hype-fueled stock surge bites the dust. Remember the DeepSeek miracle? The Chinese AI firm supposedly built a GPT rival for pennies, threatening Nvidia’s dominance. Turns out, it was too good to be true.
SemiAnalysis reveals DeepSeek’s actual hardware spending: $1.6 billion—not exactly pocket change. They’ve amassed 50,000 Nvidia GPUs, similar to industry giants. This punctures the myth of their revolutionary cost-efficiency.
‣ GPUs: Graphics Processing Units—computer chips powering AI, like Nvidia’s.
This echoes past tech bubbles. Remember the dot-com crash? Companies flaunted inflated valuations based on flimsy promises. Or the 2008 crisis, built on complex, opaque financial instruments? History doesn’t repeat, but it rhymes. Today, it’s AI narratives masking conventional, expensive tech.
So, who gets hurt? Investors chasing the next big thing, blinded by hype. They hear “disruptive innovation” and pour money into unproven ventures, only to see it evaporate.
This isn’t about China vs. America. It’s about market manipulation fueled by opaque practices and unchecked hype. Like a mirage in the desert, the promise of cheap, powerful AI lures in the unsuspecting.
‣ Market Manipulation: Artificially inflating or deflating prices to profit from the swings.
Advice
Scrutinize extraordinary claims. If it sounds too good to be true, it probably is. Due diligence beats FOMO.