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Chinese AI lab DeepSeek rattles Silicon Valley. (00:26) Meta offering creators deals to promote Instagram on other apps: report. (01:52) Diversified Energy (OTCQX:DEC) nears $1.3B deal for Permian Basin natural gas player – WSJ. (03:02)
Chinese AI startup DeepSeek’s large language model is outperforming American rivals and stirring up fears of China overtaking the U.S. in AI.
According to benchmarks posted on DeepSeek’s website, R1 outperformed models from American competitors like OpenAI, Meta (NASDAQ:META) and Anthropic, who have spent billions of dollars on building their models.
DeepSeek, solely funded by Chinese hedge fund High-Flyer, revealed its R1 model on Monday, and detailed in a paper how LLMs can be built on bootstrapped budgets and improved without human supervision.
Both DeepSeek and High-Flyer were founded by hedge fund manager Liang Wenfeng and he’s the only AI leader invited to a meeting of industry experts with China’s second-most powerful leader, Li Qiang.
DeepSeek’s R1 is open-source, similar to Meta’s Llama (NASDAQ:META).
Microsoft (NASDAQ:MSFT) CEO Satya Nadella said at the World Economic Forum in Davos, Switzerland, on Wednesday. “We should take the developments out of China very, very seriously.”
In an interview with CNBC, Alexandr Wang, CEO of Scale AI, described the AI race between the U.S. and China as an “AI war.” Wang believes China has substantially more Nvidia (NASDAQ:NVDA) H100 GPUs than people may think.
We’ll look at how this news is impacting tech stocks in just a few minutes.
Meta Platforms (NASDAQ:META) is reportedly offering compensation to creators on Instagram to promote the service on other apps.
The report, which cited details of a contract offered to a creator that was seen by CNBC, said Meta is taking advantage of ByteDance’s (BDNCE) TikTok app being unavailable from Apple and Google’s app stores to promote Instagram.
The contract reportedly requires creators to promote Instagram on other short-form video platforms such as Snapchat (SNAP) and Google’s YouTube Shorts (GOOG)(GOOGL).
Meta, ByteDance, Snap, and Google did not immediately respond to requests for comment by Seeking Alpha.
Diversified Energy (OTCQX:DEC) is in advanced talks to buy private-equity-owned Maverick Natural Resources in what would be its largest acquisition ever.
The Wall Street Journal reported Sunday that a deal would value Maverick at ~$1.3B, including debt, and could be announced as soon as today, according to the report.
Diversified Energy (OTCQX:DEC), which focuses on buying up and operating older, existing natural gas wells, had a market value of more than $800M as of Friday.
Maverick, owned by EIG Global Energy partners, has its core operations throughout Texas and Oklahoma.
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Catalyst watch:
- SES AI (SES) and Quantum Computing (QUBT) have a high level of implied volatility based on options trading.
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The most overbought stocks per their 14-day relative strength index include DXP Enterprises (DXPE), Jabil (JBL), and Cohen Circle Acquisition Corp. (CCIR).
- The most oversold stocks per their 14-day Relative Strength Index include Electronic Arts (EA), Stardust Power (SDST), and PepGen (PEPG).
Now let’s take a look at the markets ahead of the opening bell. Dow, S&P and Nasdaq futures are in the red. Crude oil is up 0.3% at $74/barrel. Bitcoin is down 5.6% at $98,000.
In the world markets, the FTSE 100 is down 0.1% and the DAX is down 1.3%.
The biggest movers for the day premarket: The AI darling, NVIDIA Corporation (NVDA) shares plummeted over 7% after the release of DeepSeek R1, a large language model developed by a Chinese research group, raising concerns about the future of capital spending in artificial intelligence.
Alongside NVIDIA, the broader technology sector is experiencing a sell-off with the Magnificent Seven tech stocks all witnessing declines. The sell-off has also extended to other AI-focused companies, including Super Micro Computer, C3.ai, Palantir, and SoundHound AI.
On today’s economic calendar:
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