January 28, 2025 - 01:43
Shares of networking chip designer Marvell Technology experienced a dramatic decline of 16.6% during the morning trading session. This sharp drop is attributed to a broader downturn in stocks closely associated with the artificial intelligence sector. The catalyst for this market shift was the announcement from Chinese AI startup DeepSeek, which unveiled its new large language model, DeepSeek-R1.
This model has demonstrated competitive performance on key global benchmarks, including coding competitions and mathematical evaluations. Notably, DeepSeek-R1 utilizes less advanced semiconductor chips, which significantly reduces production costs, bringing the total to just $5.5 million, excluding non-compute expenses.
The introduction of such an efficient and cost-effective AI model has raised concerns among investors regarding the competitive landscape in the AI chip market. As companies like Marvell Technology grapple with these emerging technologies, the volatility in their stock prices reflects the uncertainty and challenges they face in adapting to rapid advancements in AI capabilities.
