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The battle over DeepSeek as AI enters new phase: hacks, restrictions and censorship - MarketWatch

1. DeepSeek's R1 model development cost only $5.6 million, unsettling investors. 2. Nvidia and peers faced significant stock declines amid tech sector downturn. 3. DeepSeek app surged in popularity, surpassing OpenAI's downloads on App Store. 4. Concerns about DeepSeek’s censorship and cyberattacks may affect its credibility. 5. Market speculation parallels dot-com bust, potentially impacting AI stocks significantly.

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FAQ

Why Bearish?

DeepSeek's low development cost undercuts Nvidia's pricing power, signaling potential market share loss. Similar impacts were seen during emerging competitors' rise in past tech cycles.

How important is it?

The article highlights significant competitive threats to Nvidia, impacting investor perception and share prices. Competition in AI is critical, and emerging players can shift market dynamics rapidly.

Why Short Term?

Immediate market reaction reflects investor sentiment, but could stabilize over time. Past examples show that initial shock often normalizes as industries adapt.

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