Chinese artificial intelligence company DeepSeek has sparked debate in the tech industry by claiming its AI model is comparable to top North American models despite being significantly cheaper. However, experts question whether investing heavily in AI will pay off for companies like Microsoft and Alphabet.
DeepSeek’s AI model may not provide a major competitive advantage due to similar capabilities offered by other chatbots, such as ChatGPT, Microsoft’s Copilot, and Alphabet’s Gemini. This raises concerns about the justification of spending billions of dollars on AI development.
While some investors may be attracted to AI stocks, it’s essential to consider the risk and uncertainty involved. Companies like Microsoft and Alphabet are investing heavily in AI, but their sales growth has been modest so far. To determine whether investing in these companies is a good idea, investors should look beyond the hype surrounding AI and examine the underlying fundamentals of each company.
In conclusion, while some AI stocks may offer potential for long-term gains, it’s crucial to approach investments with caution, considering both the benefits and risks involved.
Source: https://www.nasdaq.com/articles/why-big-tech-may-have-much-bigger-problem-just-cost-when-it-comes-deepseeks-artificial