AI violent echo, Deepseek moment of intelligence

ON TUESDAY, ARTIFICIAL INTELLIGENCE DEALS WERE SUBJECTED TO ONE OF THE MOST INTENSE STRESS TESTS SINCE THIS YEAR. FIRST, THE KOREAN STOCK MARKET, DRIVEN BY SAMSUNG ELECTRONICS AND SK HERCULES, COLLAPSED, AND THEN THE SALE SPREAD TO THE UNITED STATES TRADING TIME, WITH MEMORY, STORAGE AND SEMICONDUCTOR UNITS BECOMING A DISASTER-PRONE AREA。

KOREA'S KOSPI INDEX DROPPED CLOSE TO 10% ON TUESDAY, AND THE EXCHANGE TRIGGERED A 20 MINUTE MELTING. AS THE CORE OF THE GLOBAL AI SUPPLY CHAIN, THERE ARE DOUBLE SETBACKS BETWEEN TRISTAR ELECTRONICS AND SK HERCULES. ACCORDING TO THE WALL STREET JOURNAL, THIS FELL ROUND WAS THEN TRANSMITTED TO THE UNITED STATES SHARE, WITH THE NASDAQ COMPOSITE INDEX FALLING BY 2.2 PER CENT AND THE GENERAL 500 INDEX FALLING BY 1.4 PER CENT; AND WITH THE AI AND CHIP-RELATED STOCK FALLING, INVESTORS BEGAN TO REASSESS THE COSTS OF DATA CENTRE CONSTRUCTION AND THE UNCERTAINTY OF FUTURE REVENUE REALIZATION。

The view was expressed that this global fall in AI was the "DeepSeek Time of the Wise" – the time when DeepSeek was released at the beginning of the year – led to a huge fall in AI, and this open-source model was too powerful to cast doubt on US AI. In his report, the investment bank Jeffrey states that the brain spectrum GLM-5.2 is in the top three of the big global model。

Allen Institute for AI Senior Research Scientist and Interconnects author Nathan Lambert called it a "step change" for open-source intelligent body models and compared the market response to the shock triggered by DeepSeek R1 in early 2025. This technical community discussion was quickly captured by market media. The Barren Weekly explains the fall of Tuesday's technology unit as a "cheap China AI" fearing a return, and agrees that this fall is similar to the one that struck DeepSeek in January. Gavekal Research Analyst Will Denyer was quoted as one of China ' s most impressive challenges to US AI so far. For investors, the question is not only whether the Chinese model has become stronger, but whether, if the cheaper open source model is good enough, hundreds of billions of dollars of data centre expenditure by large United States technology companies will support current valuations。

In an interview with the Financial Times, Pictet Assembly Senior Multi-Asset Strategyr Arun Sai stated that the market was facing two pressures at the same time: the warming of AI's suspicions of return on investment, and the resilience of the United States economy to raise interest rate expectations. The GMO Co-Assessment Manager, Ben Inker, agreed that the stock had previously grown too much to be reversed。

The fall in the US chip unit shows that the funds were not withdrawn from the entire technology, but rather from the hardware chain that had benefited most from the AI capital narrative in the past. Cantor Fitzgerald’s chief equity and macro strategist Eric Johnston sums up the current deal as the “most expensive company” sold, pointing to the hundreds of billions of dollars still planned to be invested in the construction of an AI data centre。

The decline in the Korean stock market may be more attributable to specific events. On Monday, Lee Chan-jin, President of the Korea Financial Supervisory Authority, stated that his country had previously approved a single leverage share of ETF associated with Samsung, SK Hercules. The market was also hit by the failure of MSCI to include the Republic of Korea in the watch list of developed markets, and the logic of passive capital inflows that investors had expected was temporarily frustrated。

The sellers focused their next focus on the newspaper. In an interview with Bloomberg, Pipperstone Group strategist Dilin Wu said that the weekly financial paper would be a key reading to test the hardware chain; if strong, it would directly benefit Samsung and KK Hercules. Hana Securities, a Seoul-based strategist, Lee Jae Mahn, points out that SK Hercules is growing too fast compared to the three stars, which is already a reflection of excessive optimism。

Another variable causing market anxiety is that AI capital finance is increasingly dependent on debt. The Guardian quoted Swissquate Senior Analyst Ipek Ozkardeskaya as saying that SpaceX sought large-scale debt financing shortly after its listing, raising investor concerns about large technology companies investing too much in AI infrastructure and starting to support the competition through debt。

However, many have not concluded that the AI deal is over. Dan Ives, Director of Global Science and Technology Research in Wedbush Securities, reported in his Tuesday report that the return to the Korean market would put pressure on the US Science and Technology Unit, but he still believes that AI is at an early stage of the revolution, more like a "gut check" in a technology deal. Jonathan Schiessl, Deputy Chief Investment Officer of Westminster Assembly Management, also described this fall as a necessary correction after the heat, rather than the end of the story。

THIS MEANS THAT THE FALL ON TUESDAY IS MORE LIKE A RE-PRICING OF AI TRANSACTIONS BY THE MARKET THAN A DENIAL OF AI DEMAND ITSELF. THE REAL QUESTION IS TO MOVE FROM "AI WILL GROW" TO "IS THE PRICE PAID FOR GROWTH TOO HIGH": WHO CAN TURN CAPITAL SPENDING INTO CASH FLOWS, WHO HAS OVERVALUED, AND WHO WILL BE FORCED TO SELL WHEN LEVERAGE AND CROWDED TRADES RECEDE。