Investor skepticism doesn’t take into account the insatiable demand for AI or the current bottlenecks in its development, which will require billions to overcome.

Summary

The market’s panic over DeepSeek R1 reflects a misunderstanding of AI, much like past overreactions in tech.

Despite claims that DeepSeek’s efficiency gains threaten AI investment, AI demand remains high, particularly in software development.

The release’s timing—amid Davos groupthink and a $500B AI investment plan—amplified market hysteria.

While DeepSeek offers advancements, efficiency gains are expected, and AI still faces key limitations.

Major infrastructure investments will continue, as breakthroughs are needed for AI’s broader usability.