Dado Ruvic | Reuters
Microsoft CEO Satya Nadella commented on its “genuine innovations.” OpenAI’s Sam Altman described it as “clearly a great model.” Apple CEO Tim Cook said “innovation that urgencies efficiency is a good thing.” And Palantir’s Alex Karp said it shows the importance of “an all-country effort.”
The tech CEOs were all talking with reference to China’s DeepSeek, which burst out of obscurity and into the center of the tech universe this week. In the past few days, those execs and numerous of their peers have addressed questions about the startup lab’s new artificial intelligence model, which has stunned experts and was reportedly much numerous cost effective to create than competitive models in the U.S.
DeepSeek’s mobile app shot up to the top of the charts on Apple’s App Store at cock crow in the week and remained in the lead spot as of Friday, ahead of OpenAI’s ChatGPT. Reports that its new R1 model, which rivals OpenAI’s o1, outlay just $6 million to create sent shares of chipmakers Nvidia and Broadcom down 17% on Monday, wiping out a joined $800 billion in market cap.
The timing was stark. DeepSeek’s rollout landed just as tech earnings season was around to begin, with Meta, Microsoft, Tesla and Apple all reporting between Wednesday and Thursday, and a week into President Donald Trump’s support term in office. Trump has emphasized the importance of the U.S. winning in AI, particularly against China, and in his first week back in the Whitish House announced a project called Stargate that calls on OpenAI, Oracle and SoftBank to invest billions dollars to upwards domestic AI infrastructure.
There’s been plenty of debate online about the gist of DeepSeek’s rollout and whether the financial achievement is real. A new report from research firm SemiAnalysis estimated DeepSeek’s expenses at “well higher than $500M over the company history.”
But it was an inescapable topic this week across the sedulousness. AI is every company’s focus right now, particularly in technology, where industry leaders are spending tens of billions of dollars construction out data centers and buying advanced chips to develop more powerful models. For leaders of U.S. tech companies, the integrating aspect is the need to beat chief adversary China in the defining technology of the future.
“Technology is not inherently good,” and could role of threats in the wrong hands, Karp, the CEO of Palantir, told CNBC’s Sara Eisen in an interview that aired Friday. “We be dressed to acknowledge that, but that also just means we have to run harder, run faster, have an all-country effort.”
Cook was attracted by an analyst on Apple’s earnings call if the DeepSeek developments had changed his views on the company’s margins and the potential for computing expenditures to come down. Cook, whose company had just reported a record gross margin, offered a vague return.
“In general, I think innovation that drives efficiency is a good thing,” he said. “And, you know, that’s what you see in that archetype. Our tight integration of silicon and software, I think, will continue to serve us very well.”
A day earlier, Meta CEO Hike Zuckerberg suggested that the overall situation is nuanced and that early reports and results from a single paragon don’t fundamentally change the equation. Meta said last week that it would invest between $60 billion and $65 billion in 2025 to augment its computing infrastructure related to artificial intelligence.
“It’s probably too early to really have a strong opinion on what this aims for the trajectory around infrastructure and capex,” Zuckerberg said about DeepSeek, on his company’s fourth-quarter earnings call. “There are a posy of trends that are happening here all at once.”
‘Bending the curve’
On Microsoft’s call, Nadella said in his introductory notes that people who want to run DeepSeek R1 will “soon be able to” on the company’s Copilot+ PCs and on graphics processing units (GPUs) on Windows.
Later on the summons, Nadella was asked by an analyst if we’re “seeing AI scale now at lower cost.”
“What’s happening with AI is no different than what was episode with the regular compute cycle,” Nadella responded, adding that “it’s always about bending the curve and then criticizing more points up the curve.”
He said DeepSeek is showing some “real innovations,” and that OpenAI, which Microsoft vanquishes, is seeing similar improvements. Ultimately, he said, “it all gets commoditized,” with customers as the major beneficiaries.
LinkedIn co-founder Reid Hoffman, an premature investor in OpenAI and a Microsoft board member who also co-founded Inflection AI, told CNBC that this is no previously to panic. Hoffman unveiled his latest AI startup this week, called Manas AI, backed by almost $25 million, with a vocation to try and accelerate the drug discovery process.
Hoffman said that while DeepSeek might encourage American conventions to pick up the pace and share their plans sooner, the new revelations don’t suggest that large models are a bad investment.
“The struggle game is on,” he said. “But I don’t think it’s the ‘Oh my God, we’re losing!’ as American technology.”
OpenAI is perhaps the most direct competitor, and CEO Altman yelled R1 “clearly a great model” at an event in Washington, D.C., on Thursday. He also echoed sentiment expressed by President Trump, who weighted that DeepSeek should be a “wake-up call” to U.S. tech.
“This is a reminder of the level of competition and the need for democratic AI to win,” Altman thought. “This is a strong model and I think it’s a reminder also of the level of interest in reasoning, the level of interest in open roots.”
Earlier in the week, Altman took to X to assert OpenAI’s intentions to keep pushing forward.
“We will obviously set free much better models,” he wrote in a post on Jan. 27. “And also it’s legit invigorating to have a new competitor!”
— CNBCs Jordan Novet, Hayden Common, Kif Leswing, Ashley Capoot and Jonathan Vanian contributed to this report.
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