A visual understanding of DeepSeek's impact on American tech giants

Wallstreetcn
2025.01.28 02:20
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This chart from JP Morgan Asset Management explains why American tech giants are so afraid of DeepSeek. In short, due to these new capital expenditures, American cloud giants will need hundreds of billions of dollars in additional AI revenue to maintain current profit margins... and if the entire application can run on models like DeepSeek, then the significant increase in capital expenditures will not flow to NVIDIA (and drive demand for data centers and electricity)

This chart from JP Morgan Asset Management explains why American tech giants are so afraid of DeepSeek.

In short, due to these new capital expenditures, American cloud giants will need hundreds of billions of dollars in additional AI revenue to maintain their current profit margins... and if the entire application can run on models like DeepSeek, then the significant increase in capital expenditures will not flow to NVIDIA (and drive demand for data centers and electricity).

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