Bridgewater Associates, a hedge fund manager, stated that the recent launch of advanced artificial intelligence (AI) models by Chinese startup DeepSeek could trigger a short-term market correction in various tech companies' stock prices but ultimately has a positive impact on the industry.
The startup introduced a free AI assistant last week, claiming it uses minimal data at a lower cost compared to existing services. This AI assistant has surpassed rival ChatGPT to become the top-rated free application on Apple's App Store in the United States, questioning the rationale behind U.S. tech companies' substantial AI investments.
Bridgewater acknowledged that DeepSeek's advancement could initially impact tech stock prices, particularly Nvidia, as it might prompt companies to invest in enhancing the efficiency of AI software interacting with hardware.
Despite Nvidia's significant one-day stock drop of 17%, amounting to a historic loss of $593 billion, U.S. stocks rebounded the following day, with Nvidia shares up approximately 5% in premarket trading.
The hedge fund emphasized that DeepSeek's progress is ultimately beneficial for AI technology development and could prompt widespread adoption among non-tech companies. This adoption could eventually lead to AI becoming a critical aspect for all, comparable to its significance for industry giants like Google and Microsoft, possibly indicating a future market bubble.