Oppenheimer analysts view the news that DeepSeek, an open-source Chinese large language model, is outperforming OpenAI’s models at a fraction of the training and inferencing cost as a positive for Amazon.com (AMZN) and negative for Microsoft (MSFT). It is “very positive” for the overall artificial intelligence ecosystem as DeepSeek is charging less than a 1/20th of what OpenAI is, which should drive down inferencing costs, the analyst tells investors in a research note. Opco says that while Amazon has anticipated the AI is moving to commoditized models and hardware and has designed its whole cloud platform around this, Microsoft has bet on more proprietary models and higher-cost hardware. Also negative for Microsoft, OpenAI has begun partnering with others, including ARM (ARM) and Oracle (ORCL), the firm adds. Opco sees DeepSeek as a negative for AI training and positive for inferencing infrastructure like Cloudflare (NET), DigitalOcean (DOCN), Equinix (EQIX) and application development like C3 AI (AI).
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