Introduction
Picture a world where cutting-edge AI doesn't require billions to invest or thousands of costlier chips. Guinness is the disruption that DeepSeek has brought to the global tech ecosystem. If you are an Indian investor, you probably wonder what DeepSeek is. And how will DeepSeek change the way you invest in AI? This article looks at what DeepSeek is, how it has changed the dynamics of the stock market, and how you can practically use this information in your investment portfolio.
Open Demat Account and Start Trading!
What is DeepSeek?
In Hangzhou, DeepSeek was launched in July 2023 by Liang Wenfeng, a former hedge fund trader. That is a long way from the U.S. corporate giants like OpenAI burning hundreds of millions trying to train models only to replicate what DeepSeek has accomplished: bang-on task accuracies at a fraction of the cost. The DeepSeek-R1 model was released in January 2025. It competes with OpenAI's ChatGPT and o1 in causative reasoning, coding, and mathematics capabilities and was trained on roughly 2000 Nvidia H800 GPUs at a total cost of $6,000,000.
DeepSeek has been able to realize such selectable comparisons due to their fully trained models via, each operational models compared to their reconciliation utilizing several bright depths for final labelling using the Mixture-of-Experts architecture to run only a small part of its modelling parameters for each model to perform a specific task, resulting in a significantly cheaper landscape than other models in process of demolition to the necessary arithmetic.
The rise of DeepSeek has sent ripples throughout the DeepSeek AI stock market narrative. In January 2025, the DeepSeek R1 model launched, and the stocks sold off massively, with Nvidia losing nearly $600 billion in market value in a single day, the most significant single-day drop in U.S. history. The stocks of other tech giants like Microsoft, Alphabet, and ASML also fell sharply.
Why is this? DeepSeek's low-cost model challenges the notion that AI dominance must come with hefty spending on expensive chips and data centres. For Indian investors, this is a much-needed wake-up call. The AI race is no longer about who spends the most, but about who can be the most innovative and intelligent, which includes being cost-effective.
How Should You Rethink Your AI Investments?
DeepSeek provides three major lessons for you to consider in your investment strategy:
1. Focus on only companies prioritising cost efficiency: Look for companies focusing on algorithmic innovation instead of spending brute force. Companies looking to embrace the MoE or similar equal or lower-cost methods may be on the cusp of a rapid win. Indian tech giants such as Infosys and TCS, both expanding their AI Capabilities, may pivot to cost-effective models.
2. Diversify Beyond Hardware: DeepSeek's ability to demonstrate success with significantly fewer GPUs may heighten fears of diminishing demand for chipmakers such as Nvidia. You might want to think about software-centric AI companies or Indian IT suppliers such as Wipro that are building AI applications and can access open-source models such as DeepSeek's.
3. Watch for Geopolitical Risk: The growth of DeepSeek has heightened US-China tensions around tech, with export restrictions now being discussed. As an Indian investor, you must closely watch any policy shifts that may present implications for global AI stocks or opportunities for Indian firms to enter a void if US-China compromises deepen.
Next Steps
Since DeepSeek is unlikely to be an investable security, you can still get insights from the DeepSeek impact. Start looking for Indian IT firms focused on AI apps; for example, HCL Technologies, or international firms with the brand equity to adapt to a new model like Microsoft, which may yet lag. Or pursue your explorations around AI applications, focusing on DeepSeek's open-source models. All of DeepSeek's tools are open to co-explore for free and could be used as a pathway to form a start-up.
DeepSeek and its use of AI show the importance of innovation over spending. As an investor, take on this paradigm shift, diversify your current strategy, and build for ongoing shifts in AI trends that are likely to continue breaking new ground.