How DeepSeek is Impacting Stocks and Investment Sectors

AI models are now being used by businesses and individuals alike. Be it ChatGPT or Gemini, each of these performs to help automate tasks. But recently, there has been a new addition to this list. This AI model is changing the game greatly.

And if you are wondering which is this model, then here is the answer. It is DeepSeek. It is developed by a Chinese company. As of early 2025, the DeepSeek stocks or IPO is not planned.

However, its launch impacted the stock and investment sectors greatly. Many believe that will directly impact even the best IT stocks in India. So, will this be happening?

Well, read this guide to know everything you need.

About DeepSeek

DeepSeek is an innovative AI model. It was launched in January 2025. This is mainly known for its reasoning capabilities and cost-effectiveness. There are various models developed for it, which are:

• DeepSeek Coder: An open-source model aimed at coding tasks.

• DeepSeek-V2: Focused on strong performance with reduced training costs.

• DeepSeek-R1: Perfect for reasoning and analytical tasks like ChatGPT.

Key Features of DeepSeek

DeepSeek AI stock gained fame quite quickly. Here are some of the key features that make DeepSeek stand out when compared to the rest:

• Model Architecture: DeepSeek employs a Mixture of Expert (MoE) architecture. It enhances efficiency by activating only a subset of its 671 billion parameters for each task.

• Versatile Applications: It excels in tasks like coding, translation, and reasoning. It can do all this at a much lower cost which is estimated to be 95% lower than the existing model.

• Training and Performance: It is trained on 14.8 trillion tokens. It uses Reinforcement Learning from Human Feedback (RLHF). This improves reasoning and instruction-following.

• Open-Source Advantage: It is fully open-source. This means it enables innovation and accessibility for developers and startups.

• Cost-Effectiveness: DeepSeek’s lower operational costs make advanced AI accessible to a broader range of users.

Now, that you know this, let us understand how DeepSeek is impacting the stock and investment market. Also, let us explore what will be the impact on the semiconductor stocks or the Indian stock market as a whole.

Impact of DeepSeek on Global Tech and Fintech Market

DeepSeek stock created a great disruption in the global market. Where a few shares experienced a significant fall, there were a few that remained unimpacted. At the same time, speculations regarding the future also impacted a lot of mutual funds as well.

Here are the key points that define the impact at best:

1. Market Volatility

Various tech stocks experienced great volatility. Nvidia experienced the biggest hit. It suffered a loss of approximately $589 billion in market capitalization. This is the largest single-day loss ever recorded for a company. This raised questions about how it will impact the tech and AI sectors in the future.

2. Shifting Investor Sentiment

There was a quick switch in investor sentiments. Where some of the tech stocks gained. Others experienced a great fall. Salesforce and Apple were the top gainers, with 8% and 7%, respectively. But the high-end tech stocks failed to witness a surge. This indicated a caution among the investors who are looking to invest in AI-related stocks with inflated valuations. 

3. Emerging Winners

DeepSeek technology is quite powerful. If it is integrated effectively, then the companies using it can be regarded as the winners. This helps small fintech firms to stand in a competitive position with the larger ones. This dynamic technology shift can be beneficial for investors in the long run.

4. Better Cost for AI Models

DeepSeek is quite cost-effective as it reduces the development cost by 95%. This is quite low when compared to the existing AI models in the market. This will allow businesses and developers to use the technology easily and gain a good standing in the market.

5. Impact on IT Stocks

The impact on the IT stocks globally was no less than turmoil. Major companies like Nvidia and Microsoft faced sharp declines. Where Nvidia faced a fall of around 17%, the Nasdaq Composite Index saw a decline of 3.1%. In India, the Nifty IT index fell by 3.35%. This was a broader reaction to the launch, which was short-run.

Impact of DeepSeek on Indian Market

DeepSeek is definitely a revolutionary AI tool. However, its impact on the global market is quite prominent. Now, the question is, will it impact the Indian stock and investment market in the same way? Is there anything that investors need to be cautious of while investing? Well, based on the impacts witnessed, here are the things to know:

• This, being a cost-efficient model, can be adopted by IT companies like TCS, Infosys, and Wipro to enhance their service offerings. 

• The volatility was short-lived. However, for the firms using cloud services, there can be challenges in the future. 

• Geopolitical tensions can impact the supply chain. This can lead to issues in securing critical components like computer chips. Hence, Indian companies need to act fast.

So, overall, no direct impact of the DeepSeek stock is seen on the Indian IT stocks and mutual funds. But if india wants to stay agile and ahead, it is important to adopt such AI models for effective outcomes.

Conclusion

AI is still considered to be a comparatively new field. DeepSeek is a game-changer and will prove itself helpful for various industries. But if India wishes to stay in the competition, it is high time to act and craft an AI model of its own. It's the right time to seize the opportunity.

And this is what the Indian government is planning for. It is planning to challenge DeepSeek and ChatGPT with a domestic AI model. The idea is to build an innovative model that can offer better services and help in growth.

All these are quite promising. But investors need to stay cautious. They need to keep an eye on the trends and challenges happening in the market. At the same time, understanding how these can impact stock or fund valuation is crucial. This will help you to make the right decisions in the long run.