This is a myth

Pete Tan
January 29, 2025

In partnership with

On the news of open source AI model from China, the stock market tanked 3% overnight! But I am buying hand over fist!

Let's bust some myths about DeepSeek and Qwen shaking things up in the stock market:

Myth 1: Open Source AI Means Cheap AI

✅Debunk: Sure, the software's free, but running these models isn't. You need some serious hardware to make them work, which ain't cheap. Think high-end GPUs, lots of electricity, and maintenance costs. So while you're not paying for the software, the hardware bill can be hefty.

Myth 2: More Efficient AI Means Less Demand for Fancy Chips

✅Debunk: Here's where things get interesting with the Jevons Paradox. The more efficient AI gets, the more people want to use it, which actually increases the demand for those high-end chips. It's like when cars got more gas-efficient; people drove more, not less.

Myth 3: Open Source AI Will Cut Down on Need for Supercomputing

✅Debunk: Even if you've got open-source models, if you're doing cutting-edge stuff like designing new drugs or predicting climate change, you're still going to need the beefiest computers out there. These projects are like space missions; they need top-notch gear.

Myth 4: Game Theory in AI Means We Can Chill on Chip Development

✅Debunk: Nope, it's more like an arms race in AI. Everyone's trying to one-up each other, which means you're always looking for the next big thing in hardware. It's not about having enough; it's about having more than the other guy.

The Takeaway: DeepSeek and Qwen are cool, but they're not going to make high-end tech less important. If anything, they might make the race for better tech even hotter.

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Happy Hunting!

Pete
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🚨‼️ By the way, I’ll never PM anyone on telegram or any other social media platforms. If you receive any “Pete” messaging you, these are scammers impersonating me. Pls beware!

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.