Has The AI Bubble Found Its Pin?

Porter's Journal Issue #10, Volume #2

Author

Porter Stansberry
January 27, 2025

Chinese Startup Rattles Markets… And What’s Next For AI

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China’s AI startup DeepSeek rattles markets… what it means – and doesn’t mean… what you should do with your money now… Plus, Fed meeting on tap… and consumer credit card delinquencies rise…

Table of Contents

China just fired a trillion-dollar bazooka at America’s big tech monopolies.

Late last week, Chinese artificial intelligence (“AI”) startup DeepSeek shocked the tech world when it announced details of its groundbreaking large language model (“LLM”). DeepSeek achieved the same output that America’s leading AI giants have produced – for example, OpenAI’s ChatGPT and Anthropic’s Claude – with their LLMs, but at a fraction of the cost.

This new, lower-cost LLM threatens to disrupt hundreds of billions in capital investment and trillions of dollars in market value among America’s leading technology firms.

After digesting the news over the weekend, investors sold shares of companies that stand to lose the most if DeepSeek is all that it appears to be. As of 2 pm ET, the tech-heavy Nasdaq Composite was down 3.4%, with even larger losses among individual companies like Nvidia (NVDA), which fell 17.4% to wipe out around $600 billion in market value – the largest single day loss of value of any U.S. stock in history.

So, what exactly happened… and what does it mean for your money?

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