# How DeepSeek changed the market's mind  ## Episode metadata - Episode title: How DeepSeek changed the market's mind - Show: Planet Money - Owner / Host: NPR - Episode publish date: 2025-02-01 - Episode AI description: A new AI model from DeepSeek shakes the stock market, causing a massive revaluation in AI-related companies. This shift raises questions about the future of AI dominance and the necessity of high-end computer chips. The episode also delves into the energy demands of AI technologies and the impact on energy markets. Discussions include how DeepSeek’s cost-effective approach could democratize AI access, reshaping market dynamics and investment strategies. Major players like NVIDIA and Salesforce feel the aftershocks of this surprising industry disruption. - Duration: 26:41 - Episode URL: [Open in Snipd](https://share.snipd.com/episode/a856716e-1b15-4cdd-91fd-85b2b2eea61f) - Show URL: [Open in Snipd](https://share.snipd.com/show/0d664d9a-72ad-49c5-aa9e-9d20862717ae) - Export date: 2026-02-11T20:06:35 ## Snips ### [Market Tizzy](https://share.snipd.com/snip/b253887f-78dc-4f95-9e34-26b53e69149e) 🎧 00:12 - 01:23 (01:11) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/6349067b-abe4-487e-8f27-c9fabf81dc46" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Planet Money hosts reacted to the stock market's downturn due to DeepSeek's AI model. - The market's reaction was described as an AI apocalypse and a monumental shift. #### 💬 Quote > On Monday, the stock market went into a tizzy over a new AI model from Chinese company DeepSeek. > — Podcast Narrator Describing the market reaction to DeepSeek's AI model. #### 📚 Transcript **Kenny Malone:** Here's the show. This is Planet Money from NPR. Imagine us at Planet Money rolling out of bed late on Monday morning, still in our cozy pajamas. **Mary Childs:** Yeah, we got our Teenage Mutant Ninja Turtle slippers on. We got our cup of coffee. Big **Kenny Malone:** yawn, turn on the old TV, and oh my, what is happening in the stock market right now? This **Leandro Von Vera:** is moving so fast, it's stunning. I mean, wow. It is shaking this entire industry to its core. Crushed the Nasdaq, which plunged 3.07%. Uh, **Kenny Malone:** yeah. Single largest loss in a day of market capitalization in history. **Mary Childs:** What was happening? It was apparently some kind of AI apocalypse? Okay, so AI apocalypse, not so sure about that. Okay, fine, whatever. But without a doubt, this is a monumental shift. Yeah, **Kenny Malone:** because on Monday, AI-related stocks started plummeting and TV-related people started grasping for big metaphors. It was an earthquake today in the world of artificial intelligence. --- ### [AI Arms Race](https://share.snipd.com/snip/c744bbe3-1d75-481a-90c8-1d14ee0b28d3) 🎧 02:33 - 04:10 (01:36) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/f5812e1d-3319-4e2d-aa5a-8a93157cbd4b" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - OpenAI's ChatGPT, launched in 2022, set the stage for an American AI arms race. - Companies like Google, Meta, and Microsoft invested heavily in large, expensive AI models, assuming this was necessary for competitiveness. #### 💬 Quote > The American AI arms race began. > — Podcast Narrator Explaining the competitive landscape after ChatGPT's launch. #### 📚 Transcript **Kenny Malone:** So let us first discuss how those assumptions became assumed. We shall visit a simpler ancient time. **Mary Childs:** Yes, two years ago, roughly November 2022. This is when the world got its first look at ChatGPT. You will recall we all lost our minds. ChatGPT could write poetry. It could tell stories. Maybe it could take our jobs. We'd never seen anything like it. That **Kenny Malone:** AI model was developed by an American company called OpenAI, and their AI model, ChatGPT, had taken a ton of time to develop. OpenAI had spent billions of dollars creating it. And as the model developed, it became clear that running better and better versions of GPT would be so expensive because it required the best semiconductors in the world. Lots of them. The **Mary Childs:** American AI arms race began. Google, Meta, Microsoft all built giant, expensive AI models. And **Kenny Malone:** newer companies got more competitive too. Anthropic, perplexity, also with gigantic AI models requiring unearthly amounts of compute, as they say, and money, as they also say. They do say that. And what seemed to be true in **Mary Childs:** all these cases was that in order to compete in the AI revolution, these companies needed unimaginable scale, more and more computing power, more and more investment, billions and billions of dollars. If **Kenny Malone:** there was a way to win the AI arms race, it seemed pretty clear you needed the scale of a gargantuan company to do so. --- ### [DeepSeek's Impact](https://share.snipd.com/snip/3b56fe77-1e0d-4d62-b785-f34fde981c33) 🎧 04:17 - 05:37 (01:19) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/3e573f49-317c-49c3-8eb3-fff700d17fb6" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Angelo Zeno, an analyst at CFRA Research, received inquiries from European investors early Monday morning about DeepSeek. - DeepSeek, a subsidiary of a Chinese hedge fund, openly developed its AI model, initially for internal use. #### 💬 Quote > I was up at 4 or 5 a.m., [...] and I already had a number of inquiries in my inbox from investors out in Europe. > — Angelo Zeno Describing the immediate impact of DeepSeek on investors. #### 📚 Transcript **Kenny Malone:** Monday a bummer of a day for you? In the grand scheme of days, how does that shape up? **Angelo Zeno:** Yeah, I mean, listen, as far as kind of Monday morning is concerned, it starts **Kenny Malone:** off on a sour note. **Mary Childs:** Angelo Zeno is an equities analyst at a company called CFRA Research. Angelo's job, in part, is to look at the tech world and identify good and bad stocks for investors. **Kenny Malone:** And he says on Monday, there were bad signs even before the stock market opened in the United States. I **Angelo Zeno:** was up at 4 or 5 a.m., which is when I typically wake up, and I already had a number of inquiries in my inbox from investors out in Europe. So what are those investors like? Angelo, you **Kenny Malone:** told us American AI was the future. Yeah. I mean, **Angelo Zeno:** listen, you know, who are the winners? Who are the losers from this? What exactly is happening? Great **Mary Childs:** questions, European investors. What exactly was happening? Well, **Angelo Zeno:** so yeah, **Kenny Malone:** DeepSeek was happening. Here's the backstory. This Chinese company, a subsidiary of a hedge fund, actually, had been developing an AI model just, you know, for fun, for its own hedge fundy uses, I guess. And this was not a secret. Lots of people in the AI tech world knew about this, Angelo included, because the hedge fund had been sort of open sourcing what it was doing. After all, the parent company was not an AI company. It was a hedge fund. --- ### [DeepSeek's Efficiency](https://share.snipd.com/snip/99a12a5d-08dc-4b97-8bc0-dfe02c0e672c) 🎧 05:37 - 06:54 (01:17) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/ac3374ee-6e04-4add-bcf7-fdccfe4d08d4" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - DeepSeek's AI model achieved performance comparable to American models, but at a fraction of the cost. - This challenged the assumption that massive scale and top-tier chips were essential for AI competitiveness. #### 💬 Quote > DeepSeek is not a big, fancy, expensive AI model. It was reportedly built for a fraction of the cost [...] > — Podcast Narrator Highlighting DeepSeek's cost-effectiveness compared to American AI models. #### 📚 Transcript **Mary Childs:** Right. So people generally knew that this AI model was likely more useful than just for hedge fundy things. But what seems to have happened, what seems to really have rocked the stocks, were a few key things. **Kenny Malone:** Yeah. one, the DeepSeek AI had been training, getting better and better. And it seems that the newest version, released just 11 days ago, had got real good. It hit certain benchmarks that showed it was possibly, allegedly, as good or nearly as good as the gigantic, fancy, expensive AI models being built by the American AI companies. **Mary Childs:** Except, and here's the big thing, number two, DeepSeek is not a big, fancy, expensive AI model. It was reportedly built for a fraction of the cost and reportedly did not need top of the chips and semiconductors and processors to run like the models from the American AI companies need. And then big thing number three, **Kenny Malone:** according to Angelo Zeno, news of all of this starts to spread. over the weekend, last weekend, lots of people download a DeepSeek app, presumably to see **Angelo Zeno:** what this buzzy new AI model is really like. DeepSeek topped the App Store chart and kind of got ahead of OpenAI. I think it kind of, you know, put the technology right in the eye of the storm for investors out there. --- ### [NVIDIA's Plunge](https://share.snipd.com/snip/c067a2a4-3c41-4af7-a4c7-f2005f2aba52) 🎧 07:25 - 09:13 (01:48) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/5c3bd9c8-794e-481e-953b-14962893cc97" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Chipmakers like NVIDIA, heavily reliant on the AI boom, experienced significant stock drops. - NVIDIA's stock, which had seen massive growth, fell nearly 20%, a historic single-day drop. #### 💬 Quote > NVIDIA, specifically NVIDIA, was the one that got the most attention out there. > — Angelo Zeno Pinpointing NVIDIA as the company most affected by the DeepSeek news. #### 📚 Transcript **Mary Childs:** So which tech stocks had an awful Monday-eye? So **Kenny Malone:** when **Angelo Zeno:** you kind of look at some of the names that got hit the most, I mean, essentially makers that are heavily exposed to the data center market. And, you know, that would include Broadcom, Marvell, **Kenny Malone:** Micron. Is it Marvell? I've been saying Marvel this whole time. No, I'm **Angelo Zeno:** a nerd who reads comics. Okay. Yeah. Whoops. So Marvell, specifically NVIDIA, was the one that got the most attention out there. Ah, **Mary Childs:** yes. NVIDIA. NVIDIA manufactures top-of processors that have become the not-very sauce that American-made AI models need in order to do the unfathomably large amounts of computing required to train and run AI models. If AI is the gold, NVIDIA is selling the picks and the shovels. **Kenny Malone:** So for a lot of the people who were interested in investing in the brave new AI future, NVIDIA seemed like a good place to do it, especially because it has actually been quite hard to invest directly in the AI companies. Like some of the biggest companies developing the models, OpenAI, Anthropic, they do not have shares you can just go and buy. They're not publicly listed, not yet at least. All **Mary Childs:** of this is why NVIDIA, seemingly overnight, has become one of the most valuable companies on the planet. In 2020, you could buy NVIDIA's stock for like six bucks. Last week, 142 bucks. That is like 23x **Kenny Malone:** growth, because the only way the AI revolution can happen is with the fancy AI chips from NVIDIA. And in fact, NVIDIA was seemingly so important that in 2022, the United States banned NVIDIA's most powerful chips from being sent to China to preserve America's AI advantage for national security reasons. You --- ### [Nuclear Energy's Fall](https://share.snipd.com/snip/fdfc6c16-edef-4910-ae86-7a2819e7a044) 🎧 11:42 - 13:34 (01:52) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/6d2e622e-cd66-4334-b20c-bcab7638fdd1" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Constellation Energy, America's largest nuclear power provider, saw its stock plummet after DeepSeek's news. - Investors had been betting on nuclear energy to power the AI revolution's energy demands. #### 💬 Quote > Once unwanted, Constellation Energy is one of the hottest stocks. > — Jennifer Hiller Highlighting the ironic shift in Constellation Energy's stock value. #### 📚 Transcript **Mary Childs:** our next lesson learned from the Monday AI apocalypse, we turn to Jennifer Hiller of The Wall Street Journal. I'm **Kenny Malone:** going to share my screen and I'm just going to explain in one second. Okay. Jennifer **Mary Childs:** has been reporting on the energy industry for over a decade. **Kenny Malone:** I just want you to read a headline that you wrote from like about two weeks ago. Yeah. **Jennifer Hiller:** Once unwanted, Constellation Energy is one of the hottest stocks. Once unwanted, Constellation Energy is one of the hottest stocks. **Mary Childs:** It's a story about how investors were pouring into America's biggest provider of nuclear power. The value had been shooting up and Constellation Energy hit an all-time high stock price just last week. **Kenny Malone:** Well, Jennifer, it seems you know what I'm going to do next, which is two weeks later, I'm just going to pull up a graph of their stock price. It **Jennifer Hiller:** looks like it sort of fell of a cliff and then bumped along the bottom and then dipped some more. Yeah. I'm obviously a big jinx. You don't want me to write a story about your all time high. But **Mary Childs:** this was not Jennifer's fault. This was, of course, DeepSeek's fault. Yes. **Jennifer Hiller:** OK. **Kenny Malone:** So in case you have not heard this, the AI revolution is going to require a lot of energy. And this goes back to the market assumption we just discussed about how training AI models and running them requires really high-tech processors, which use loads of electricity. And then AI uses loads of those fancy processors using loads of electricity, and they put them all together, and I guess in giant big buildings. These, **Jennifer Hiller:** you know, really large data centers that are kind of often on the edge of town in great big buildings. Should **Kenny Malone:** we imagine it like having the electrical meter outside and it's just spinning so fast you can't see the hand? **Jennifer Hiller:** I like that idea. I don't know actually how they're metered, but it must be some very fancy version of that. --- ### [Shift in Focus](https://share.snipd.com/snip/8cba0dc3-1674-4e84-824a-4c1a6228b43e) 🎧 16:16 - 16:41 (00:24) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/2ba95f41-3bf8-4457-9d82-6805fd2d94bd" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - DeepSeek's emergence doesn't negate the AI revolution but shifts the focus from enablers to adopters. - Companies benefiting from AI usage, rather than those supplying the infrastructure, might gain prominence. #### 💬 Quote > The Monday-i apocalypse was not about whether or not there will be an AI revolution. > — Kenny Malone Emphasizing the continued relevance of AI despite the market shift. #### 📚 Transcript **Jennifer Hiller:** So yeah, that shows you like how the tentacles **Kenny Malone:** of this stretch out. The Monday-i apocalypse was not about whether or not there will be an AI revolution. If anything, the introduction of Deep Seek means more AI, lowering the barrier to AI, making it cheaper to use for, I don't know, whatever your AI mind can dream up. --- ### [DeepSeek's Validation](https://share.snipd.com/snip/1fa13c42-2f74-4771-bf33-98ef753a34f2) 🎧 18:40 - 21:57 (03:16) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/cdf2d199-53e1-4853-961d-aea2e288febe" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Leandro Von Werra from Hugging Face is replicating DeepSeek to verify its claims. - Initial findings suggest DeepSeek performs comparably to American models on benchmarks, including PhD-level exams. #### 💬 Quote > Capability-wise, we don't see any benchmarks that show that they have some gaps in the knowledge. > — Leandro Von Werra Affirming DeepSeek's capabilities based on initial benchmark tests. #### 📚 Transcript **Mary Childs:** There is a company called Hugging Face. Their logo is like that smiley face emoji that's also giving you a hug with those two big emoji hands. Hugging Face, you know? I can **Kenny Malone:** see that it is a very cute logo. But it is a kind of AI company where Leandro Von Vera works. And he describes the basic business model this way. So you can imagine it a little **Leandro Von Vera:** bit like GitHub, if you're familiar with GitHub, where people share code and everything's free. But **Kenny Malone:** there's an enterprise edition that costs money and that's how they make money. But like, the point is, Hugging Face, Cute Logo, like an AI sharing platform. They do not build gigantic proprietary AI models to compete with OpenAI or Anthropic or Google **Leandro Von Vera:** or whatever. **Mary Childs:** And the reason we got in touch with Leandro is that he heads up their research team. **Leandro Von Vera:** So our job is not to make money. Our job is mostly to... To **Kenny Malone:** spend money. To spend **Leandro Von Vera:** money and build things **Kenny Malone:** that **Leandro Von Vera:** are very **Kenny Malone:** useful. And what's been useful lately is DeepSeek or, you know, playing around with DeepSeek's new chatbot that partially freaked the markets out about the future of AI. **Mary Childs:** Because there are really two reasons why the market freaked out. First, that it was made in a way that was cheaper and more efficient than how things ChatGPT were made. And the other reason was that DeepSeek's model was allegedly really good. So the big question hovering over this entire week has been, is all of that real and true? Or were markets overreacting? **Kenny Malone:** So let's take these one by one. Is DeepSeek actually as good as the fancy American AIs? Well, Landro says we have ways to test this. There are these standardized tests, benchmarks for AI models. They used to be pretty simple math problems or whatever. But as the models have been trained more and more and have gotten better and better. **Leandro Von Vera:** We've upped the exams a little bit. So now we're closer to like PhD level exams. And we can measure quite, quite well, right? Like how many of the questions does a get right? So **Kenny Malone:** is DeepSeq passing PhD level **Leandro Von Vera:** coding, PhD level math? Yeah. So those models are getting like really good at solving certain kinds of questions. So for example, these models can solve some of, for example, math Olympiad questions. And **Mary Childs:** here I will just interject to note that we do have on staff one person who has a math degree and it's Kenny. **Kenny Malone:** True. Not an Olympiad, but I was excited. Quickly downloaded some math Olympiad questions, pulled them up on my screen for Leandro. This **Mary Childs:** is such a big day for you, I feel like. Oh, yeah. never gets to happen. The **Kenny Malone:** first, all right, hold on. Show that for each n, we can find an n-digit number with all its digits odd, which is divisible by five to the nth power. Yeah. Deep Seek can do that? Sometimes. I mean, I can only sometimes do that. So yeah. All right. Fair enough. **Leandro Von Vera:** Exactly. I also, I'm like a physicist by training and it takes exercise to be good at **Kenny Malone:** those questions. Yeah. Okay. So that's what we're talking about here, huh? Yeah. **Leandro Von Vera:** Capability-wise, we don't see any benchmarks that show that they have some gaps in **Kenny Malone:** the knowledge. Yeah, no apparent gaps between how DeepSeq's model performs and how the other models perform. Leandro --- ### [DeepSeek's Cost-Effectiveness](https://share.snipd.com/snip/9a1205f6-ba2f-4905-83f2-e3517b5cef95) 🎧 23:41 - 24:18 (00:36) <iframe src="https://share.snipd.com/embed/obsidian-player/snip/c62cdc6c-cf1a-46cf-8024-7aa16377a48a" width="100%" height="100" style="border: none; border-radius: 12px;" sandbox="allow-scripts allow-same-origin allow-forms allow-popups allow-clipboard-write" ></iframe> - Leandro's replication efforts suggest that DeepSeek is indeed significantly cheaper to train and run. - This validates DeepSeek's claims, potentially disrupting the market's assumptions about AI development costs. #### 💬 Quote > napkin calculation, it's probably the right order of magnitude. > — Leandro Von Werra Confirming the cost-effectiveness of DeepSeek's approach. #### 📚 Transcript **Mary Childs:** so those numbers. Again, DeepSeq's latest version was reportedly much cheaper to train and much cheaper to run than the big American models. Are **Kenny Malone:** the claims that have been made about DeepSeq, the cheapness, the fact that it can run on less powerful processors, do all of these things seem to be checking out? Yeah, **Leandro Von Vera:** so I think that's something that we want to investigate a bit. So far, it seems like napkin calculation, it's probably the right order of magnitude. **Kenny Malone:** Yeah, in the ballpark, which is notable because there had kind of been some murmurs of skepticism around the specific numbers DeepSeq was putting out. But --- Created with [Snipd](https://www.snipd.com) | Highlight & Take Notes from Podcasts