DeepSeek, the Chinese AI app, does it pose a threat to the "Fantastic Seven"?

The recent emergence of DeepSeek, an artificial intelligence application developed in China, has caused a stir in the technology and financial sectors, especially in the context of Silicon Valley's "Magnificent Seven," which includes giants like Apple, Microsoft, and Nvidia. The app, which became the most downloaded on the U.S. App Store, has had an immediate impact, leading to significant declines in the stock prices of these tech companies. Nvidia, for example, experienced a drastic 17% drop in its value, resulting in a loss of approximately $400 billion in market capitalization.

The meteoric rise of DeepSeek, which claims to have spent only $5.6 million on its development, raises questions about its ability to challenge the U.S. dominance in the artificial intelligence sector. This success comes at a time when it was believed that the United States' supremacy in semiconductors and its control over access to these technologies ensured its leadership in this field. However, the emergence of DeepSeek has sparked a debate about whether American companies should start worrying about their position in the global market.

Jorge Ramos, general manager of BBVA Bolsa, believes that while DeepSeek has performed remarkably, it is premature to attribute all the blame for the decline in the stock prices of companies like Nvidia solely to it. According to him, market volatility and the need for correction due to inflated prices are factors that have contributed to this situation. "The market needed stabilization, and an event like the arrival of DeepSeek may have been the catalyst," Ramos asserts. Despite its potential, he warns that the app still faces significant challenges, such as regulation and unfair competition that could arise in the geopolitical landscape.

Pablo Leno, manager of Renta4 SAB, shares a similar view, highlighting that DeepSeek presents itself as a future competitor, thanks to its open-source model, which allows for reduced implementation and training costs. However, he emphasizes that it is currently in an early phase and still lacks the infrastructure and experience of large U.S. tech companies. "The impact of DeepSeek could be overstated, but in the long run, it could become a relevant competitor," Leno adds.

On his part, José Riveros, product owner at Capitaria, points out that while DeepSeek shows advantages in terms of cost and efficiency, there are legitimate concerns about privacy and data security. The management of sensitive information is a critical issue, especially given China's reputation in this area. "It is premature to compare this new application with the 'Magnificent Seven' without first observing how data security technologies develop in China," Riveros warns.

The DeepSeek model could democratize access to artificial intelligence, allowing more companies and individual users to access technologies that were previously prohibitive due to high costs. Leno suggests that this approach could force large tech companies to reconsider their business strategies, particularly those based on high capital investments and hardware costs. This could lead to greater adoption of more accessible technologies in the market.

However, concerns about data privacy persist, and the tech community is questioning whether DeepSeek will be able to maintain consumer trust while navigating this complicated landscape. Riveros emphasizes that although the app has demonstrated that it is possible to train artificial intelligence models at a low cost, this should not overlook the security aspects that are crucial in this type of technology.

DeepSeek has shaken the market by challenging the notion that the development of artificial intelligence necessarily involves high expenses. The company has shown that by combining innovative techniques and using lower-cost chips, it is possible to accelerate AI development without compromising quality. However, this approach poses a dilemma: accelerating development at the expense of privacy and security could have consequences that need to be considered.

As the debate over the comparison between DeepSeek and the "Magnificent Seven" continues, experts agree that the evolution of this app and its impact on the market should be closely monitored. The arrival of this new competition could not only alter the landscape of artificial intelligence in the future but also redefine the dynamics of the tech sector on a global scale. The large U.S. tech companies are at a crossroads, and how they respond to this challenge could determine their trajectory in the years to come.