Podcast Notes: DeepSeek R2 - The Tech Stock "Atom Bomb"Overview

• DeepSeek R2 could heavily impact tech stocks when released (April or May 2025)
• Could threaten OpenAI, Anthropic, and major tech companies
• US tech market already showing weakness (Tesla down 50%, NVIDIA declining)

Cost Claims

• DeepSeek R2 claims to be 40 times cheaper than competitors
• Suggests AI may not be as profitable as initially thought
• Could trigger a "race to zero" in AI pricing

NVIDIA Concerns

• NVIDIA's high stock price depends on GPU shortage continuing
• If DeepSeek can use cheaper, older chips efficiently, threatens NVIDIA's model
• Ironically, US chip bans may have forced Chinese companies to innovate more efficiently

The Cloud Computing Comparison

• AI could follow cloud computing's path (AWS → Azure → Google → Oracle)
• Becoming a commodity with shrinking profit margins
• Basic AI services could keep getting cheaper ($20/month now, likely lower soon)

Open Source Advantage

• Like Linux vs Windows, open source AI could dominate
• Most databases and programming languages are now open source
• Closed systems may restrict innovation

Global AI Landscape

• Growing distrust of US tech companies globally
• Concerns about data privacy and government surveillance
• Countries might develop their own AI ecosystems
• EU could lead in privacy-focused AI regulation

AI Reality Check

• LLMs are "sophisticated pattern matching," not true intelligence
• Compare to self-checkout: automation helps but humans still needed
• AI will be a tool that changes work, not a replacement for humans

Investment Impact

• Tech stocks could lose significant value in next 2-6 months
• Chip makers might see reduced demand
• Investment could shift from AI hardware to integration companies or other sectors

Conclusion

• DeepSeek R2 could trigger "cascading failure" in big tech
• More focus on local, decentralized AI solutions
• Human-in-the-loop approach likely to prevail
• Global tech landscape could look very different in 10 years

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