Deepseek $5.6M? Pull the other one!27 Jan 2025 19:33
If DeepSeek has received government subsidies to lower its setup costs, this could have several implications for U.S. tech stocks and the broader technology market:
Competitive Advantage
Artificial Cost Leadership: Government subsidies could allow DeepSeek to develop and scale its AI models at costs significantly below market levels, creating an artificial cost advantage. This could put U.S. firms, which operate in a Market-driven environment, at a disadvantage.
Market Disruption: Subsidized AI solutions could be priced much lower, disrupting global markets and forcing U.S. firms to either lower their prices (hurting profit margins) or lose market share.
Also thought US was going to restrict chip sales to China, so that would have hit profit margins?