DeepSeek's AI Shockwave Challenges U.S. Tech Giants' Spending Spree

Chinese startup DeepSeek's low-cost AI models have unsettled the U.S. tech industry, causing leaders at Microsoft and Meta to justify extensive investments in computing infrastructure. As their share prices react to AI market dynamics, the focus intensifies on balancing expenses and the path to revenue.

In a stunning move, Chinese startup DeepSeek has unveiled low-cost AI models that have sent ripples across the U.S. technology sector. The startup's advancements have provoked reactions from industry titans Microsoft and Meta, which have found themselves defending their significant investments in AI infrastructure.

Meta CEO Mark Zuckerberg and Microsoft CEO Satya Nadella have characterized these expenditures as crucial for maintaining a competitive edge. They argue that expanding their vast computing networks is vital to meet burgeoning corporate demand, even as their stock prices wobble amid investor concerns over expenditure.

While DeepSeek boasts minimal development costs, U.S. firms face criticism for spending billions, with their monetization strategies under scrutiny. As investor patience wears thin, Microsoft and Meta's latest financial disclosures highlight the pressures of the AI race.

(With inputs from agencies.)