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Investors Chasing Their Tails in AI
Social media and the Internet excel at making investors chase after-the-fact justifications (See Click to Read). It's a bewildering dance that has retail investors chasing their tails instead of following the invisible hand. The ongoing debate between OpenAI and DeepSeek distracts the majority from the bigger picture. As Palantir has explained numerous times to investors, artificial intelligence is a commodity business. Commodity businesses do not command high valuations, regardless of how many times Jim Cramer defends Nvidia's ($NVDA) business model, 😂. DeepSeek's introduction on Friday was a rude awakening for many, revealing that real competition is inherently deflationary.
Click to Read 01/28/25
Many of social media's mouthpieces will prevent the majority from adapting to real trends. Below is a short list of the pro-Nvidia and OpenAI commentary will keep the majority out of the real trends for as long as possible:
Have you used the now famous, legendary Sputnik? Have you thought about whether it can power the omniverse? How Jensen has a $3000 version and it looks like it's being bought by people who could easily use Chinese tech?
— Jim Cramer (@jimcramer) January 28, 2025
I fully expect our inferiority complex and a belief that Nvidia was all smoke and mirrors, will cause people to hit the bid, Nvidia and all the others. They have to, they fear "sputnik." Yes, let's politicize the whole thing
— Jim Cramer (@jimcramer) January 28, 2025
Just fyi, @deepseek_ai collects your IP, keystroke patterns, device info, etc etc, and stores it in China, where all that data is vulnerable to arbitrary requisition from the 🇨🇳 State.
— Luke de Pulford (@lukedepulford) January 27, 2025
From their own privacy policy: pic.twitter.com/wueJokHcn3
DeepSeek claims they spent $5.5 million
— borovik (@3orovik) January 27, 2025
if they’re using 50,000 Nvidia H100 GPU
that would mean the cost is over $1.5 BILLION
that means this sell off is unwarranted
continue the bull market please
A few days later, Alibaba, often likened to the Amazon of China, announced that its newly released AI surpasses DeepSeek in capabilities.
Click to Read 01/29/25
Alibaba's announcement support the argument that AI and AI chips behind it are on track to becoming a commodity-like industry with much smaller profit margins.
Where do we go from here?
Follow me on 𝕏 or Facebook for further discussion.
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The Matrix provides market-driven trend, cycles, and intermarket analysis.
