https://www.digiteex.com Digitex Solutions Fri, 21 Feb 2025 20:36:15 +0000 en-US hourly 1 224764844 https://www.digiteex.com/were-buying-the-dip-in-an-ai-data-center-play-still-under-pressure-post-deepseek/ https://www.digiteex.com/were-buying-the-dip-in-an-ai-data-center-play-still-under-pressure-post-deepseek/#respond Fri, 21 Feb 2025 20:36:13 +0000 https://www.digiteex.com/were-buying-the-dip-in-an-ai-data-center-play-still-under-pressure-post-deepseek/ We’re buying 25 shares of Eaton just below $300 each. Following Friday’s trade, Jim Cramer’s Charitable Trust will own 325 shares of ETN, increasing its weighting to about 2.7% from about 2.5%. Friday’s market losses picked up steam in the afternoon with momentum stocks continuing to roll over and cyclical stocks falling on weakening economic data. Fortunately, we have limited the impact of these losses by building up a huge war chest of cash. It’s no secret that the economy has slowed over the past few weeks. Using the Atlanta Fed GDPNow forecast as a guide, the latest estimate of first-quarter economic growth is 2.3%, down from a 3.9% estimate on Feb. 3. We’re not surprised to see consumer discretionary and industrials as two of the worst-performing sectors this month. However, we do expect the economic slowdown to be short-lived. So, we’re dipping into our cash hoard to beef up one of those beaten-down industrial names, which makes electrical components and power management systems used to run energy-intensive AI data centers. With Eaton shares trading below their DeepSeek freakout levels, we see this as an opportunity to buy more. ETN 1Y mountain Eaton 1 year The first instinct when the Chinese startup claimed that it made a more efficient, lower-cost large language model was that the world wouldn’t need as many data centers to power artificial intelligence. Since data centers are one of Eaton’s largest end markets and one of the company’s fastest-growing, the DeepSeek news on Jan. 27 caused shares to fall 15% to about $311 each. Unlike Club AI chip king Nvidia , whose stock has recovered most of its DeepSeek losses, Eaton shares have a longer road to recovery. However, as we’ve learned in recent weeks, there has been zero change in the spending habits of the big tech hyperscalers building out these data centers. In fact, these titans plan to invest more money in their AI infrastructure in 2025 versus last year Club names Amazon , Microsoft , Meta Platforms , and Alphabet all raised their capital expenditure outlooks for this year, erasing concerns that one would break ranks and slow down their investments. We also heard Eaton’s thoughts on the subject when the company reported strong earnings on Jan. 31. During the quarterly conference call, management explained that a shift toward more inferencing data centers and away from training specialized data centers would be a positive development for the business because it would speed up construction times without a change in the amount of electrical needed. In short, DeepSeek’s impact on the pace of AI infrastructure investment has been overblown. And, that’s why we are buyers of Eaton, a stock we believe in for the long haul. (Jim Cramer’s Charitable Trust is long ENT, AMZN, MSFT, META, GOOGL, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.


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]]> https://www.digiteex.com/were-buying-the-dip-in-an-ai-data-center-play-still-under-pressure-post-deepseek/feed/ 0 4998 https://www.digiteex.com/chinas-deepseek-has-some-big-ai-claims-not-all-experts-are-convinced/ https://www.digiteex.com/chinas-deepseek-has-some-big-ai-claims-not-all-experts-are-convinced/#respond Thu, 30 Jan 2025 11:49:08 +0000 https://www.digiteex.com/chinas-deepseek-has-some-big-ai-claims-not-all-experts-are-convinced/ Chinese artificial intelligence firm DeepSeek rocked markets this week with claims its new AI model outperforms OpenAI’s and cost a fraction of the price to build.The assertions — specifically that DeepSeek’s large language model cost just $5.6 million to train — have sparked concerns over the eyewatering sums that tech giants are currently spending on computing infrastructure required to train and run advanced AI workloads.But not everyone is convinced by DeepSeek’s claims.CNBC asked industry experts for their views on DeepSeek, and how it actually compares to OpenAI, creator of viral chatbot ChatGPT which sparked the AI revolution.What is DeepSeek?Last week, DeepSeek released R1, its new reasoning model that rivals OpenAI’s o1. A reasoning model is a large language model that breaks prompts down into smaller pieces and considers multiple approaches before generating a response. It is designed to process complex problems in a similar way to humans.DeepSeek was founded in 2023 by Liang Wenfeng, co-founder of AI-focused quantitative hedge fund High-Flyer, to focus on large language models and reaching artificial general intelligence, or AGI.AGI as a concept loosely refers to the idea of an AI that equals or surpasses human intellect on a wide range of tasks.Much of the technology behind R1 isn’t new. What is notable, however, is that DeepSeek is the first to deploy it in a high-performing AI model with — according to the company — considerable reductions in power requirements.”The takeaway is that there are many possibilities to develop this industry. The high-end chip/capital intensive way is one technological approach,” said Xiaomeng Lu, director of Eurasia Group’s geo-technology practice.”But DeepSeek proves we are still in the nascent stage of AI development and the path established by OpenAI may not be the only route to highly capable AI.” How is it different from OpenAI?DeepSeek has two main systems that have garnered buzz from the AI community: V3, the large language model that unpins its products, and R1, its reasoning model.Both models are open-source, meaning their underlying code is free and publicly available for other developers to customize and redistribute.DeepSeek’s models are much smaller than many other large language models. V3 has a total of 671 billion parameters, or variables that the model learns during training. And while OpenAI doesn’t disclose parameters, experts estimate its latest model to have at least a trillion.In terms of performance, DeepSeek says its R1 model achieves performance comparable to OpenAI’s o1 on reasoning tasks, citing benchmarks including AIME 2024, Codeforces, GPQA Diamond, MATH-500, MMLU and SWE-bench Verified.Read more DeepSeek coverageIn a technical report, the company said its V3 model had a training cost of only $5.6 million — a fraction of the billions of dollars that notable Western AI labs such as OpenAI and Anthropic have spent to train and run their foundational AI models. It isn’t yet clear how much DeepSeek costs to run, however.If the training costs are accurate, though, it means the model was developed at a fraction of the cost of rival models by OpenAI, Anthropic, Google and others.Daniel Newman, CEO of tech insight firm The Futurum Group, said these developments suggest “a massive breakthrough,” although he shed some doubt on the exact figures.”I believe the breakthroughs of DeepSeek indicate a meaningful inflection for scaling laws and are a real necessity,” he said. “Having said that, there are still a lot of questions and uncertainties around the full picture of costs as it pertains to the development of DeepSeek.”Meanwhile, Paul Triolio, senior VP for China and technology policy lead at advisory firm DGA Group, noted it was difficult to draw a direct comparison between DeepSeek’s model cost and that of major U.S. developers.”The 5.6 million figure for DeepSeek V3 was just for one training run, and the company stressed that this did not represent the overall cost of R&D to develop the model,” he said. “The overall cost then was likely significantly higher, but still lower than the amount spent by major US AI companies.” DeepSeek wasn’t immediately available for comment when contacted by CNBC.Comparing DeepSeek, OpenAI on priceDeepSeek and OpenAI both disclose pricing for their models’ computations on their websites.DeepSeek says R1 costs 55 cents per 1 million tokens of inputs — “tokens” referring to each individual unit of text processed by the model — and $2.19 per 1 million tokens of output.In comparison, OpenAI’s pricing page for o1 shows the firm charges $15 per 1 million input tokens and $60 per 1 million output tokens. For GPT-4o mini, OpenAI’s smaller, low-cost language model, the firm charges 15 cents per 1 million input tokens.Skepticism over chipsDeepSeek’s reveal of R1 has already led to heated public debate over the veracity of its claim — not least because its models were built despite export controls from the U.S. restricting the use of advanced AI chips to China. DeepSeek claims it had its breakthrough using mature Nvidia clips, including H800 and A100 chips, which are less advanced than the chipmaker’s cutting-edge H100s, which can’t be exported to China.However, in comments to CNBC last week, Scale AI CEO Alexandr Wang, said he believed DeepSeek used the banned chips — a claim that DeepSeek denies.Nvidia has since come out and said that the GPUs that DeepSeek used were fully export-compliant.The real deal or not?Industry experts seem to broadly agree that what DeepSeek has achieved is impressive, although some have urged skepticism over some of the Chinese company’s claims.”DeepSeek is legitimately impressive, but the level of hysteria is an indictment of so many,” U.S. entrepreneur Palmer Luckey, who founded Oculus and Anduril wrote on X.”The $5M number is bogus. It is pushed by a Chinese hedge fund to slow investment in American AI startups, service their own shorts against American titans like Nvidia, and hide sanction evasion.”Seena Rejal, chief commercial officer of NetMind, a London-headquartered startup that offers access to DeepSeek’s AI models via a distributed GPU network, said he saw no reason not to believe DeepSeek.”Even if it’s off by a certain factor, it still is coming in as greatly efficient,” Rejal told CNBC in a phone interview earlier this week. “The logic of what they’ve explained is very sensible.”However, some have claimed DeepSeek’s technology might not have been built from scratch.”DeepSeek makes the same mistakes O1 makes, a strong indication the technology was ripped off,” billionaire investor Vinod Khosla said on X, without giving more details.It’s a claim that OpenAI itself has alluded to, telling CNBC in a statement Wednesday that it is reviewing reports DeepSeek may have “inappropriately” used output data from its models to develop their AI model, a method referred to as “distillation.””We take aggressive, proactive countermeasures to protect our technology and will continue working closely with the U.S. government to protect the most capable models being built here,” an OpenAI spokesperson told CNBC.Commoditization of AIHowever the scrutiny surrounding DeepSeek shakes out, AI scientists broadly agree it marks a positive step for the industry.Yann LeCun, chief AI scientist at Meta, said that DeepSeek’s success represented a victory for open-source AI models, not necessarily a win for China over the U.S. Meta is behind a popular open-source AI model called Llama.”To people who see the performance of DeepSeek and think: ‘China is surpassing the US in AI.’ You are reading this wrong. The correct reading is: ‘Open source models are surpassing proprietary ones’,” he said in a post on LinkedIn.”DeepSeek has profited from open research and open source (e.g. PyTorch and Llama from Meta). They came up with new ideas and built them on top of other people’s work. Because their work is published and open source, everyone can profit from it. That is the power of open research and open source.”WATCH: Why DeepSeek is putting America’s AI lead in jeopardy- CNBC’s Katrina Bishop and Hayden Field contributed to this report


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]]> https://www.digiteex.com/chinas-deepseek-has-some-big-ai-claims-not-all-experts-are-convinced/feed/ 0 4530 https://www.digiteex.com/meta-wont-slow-ai-spending-despite-deepseeks-breakthrough/ https://www.digiteex.com/meta-wont-slow-ai-spending-despite-deepseeks-breakthrough/#respond Thu, 30 Jan 2025 05:59:08 +0000 https://www.digiteex.com/meta-wont-slow-ai-spending-despite-deepseeks-breakthrough/ Mark Zuckerberg, CEO of Meta Platforms Inc., arrives for the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.David Paul Morris | Bloomberg | Getty ImagesMeta CEO Mark Zuckerberg on Wednesday said it’s too early to tell what impact DeepSeek’s breakthrough AI model will have on his company and the broader tech industry. Still, Zuckerberg poured cold water on the notion that Meta’s overall AI spending will soon drop now that DeepSeek has allegedly proven that cutting-edge AI requires far less money and computing resources than previously thought.”It’s probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and CapEx,” Zuckerberg said. “There are a bunch of trends that are happening here all at once.”The technology markets were reeling this week over an AI model created by DeepSeek, which is a Hangzhou-based AI lab linked to the Chinese hedge fund High-Flyer. DeepSeek claims it only took two months and less than $6 million to develop its R1 large language model. That news caused Nvidia shares to tank 17% on Monday because of the implications that companies don’t need as many of the chip-maker’s graphics processing units for their own artificial-intelligence projects.Zuckerberg discussed DeepSeek during a call with analysts Wednesday as part of Meta’s fourth-quarter earnings. The company reported that sales rose 21% year over year to $48.39 billion, ahead of Wall Street expectations.Meta’s shares rose nearly 2% on Monday, indicating some investors believe DeepSeek’s cost-efficiency could mean the social media company may be able to create powerful AI systems for less money. Meta announced last week plans to invest between $60 billion and $65 billion this year as part of its AI push. The company on Wednesday said its 2025 total expenses would come in between $114 billion to $119 billion.Zuckerberg said Meta is still digesting some of DeepSeek’s feats and his team hopes to eventually implement some of those advancements for their own AI projects.”That’s part of the nature of how this works, whether it’s a Chinese competitor or not,” Zuckerberg said, referring to how one company’s advances end up benefiting others.While it’s possible that companies will eventually require less computing resources to train these powerful models, Zuckerberg said that having a ton of server power may be necessary when the software is actually running and performing actions, resulting in “a higher level of intelligence and a higher quality of service.””It’s going to be expensive for us to serve all of these people because we are serving a lot of people,” said Zuckerberg, whose company said it had 3.35 billion daily active people in the fourth quarter.Meta will continue to learn from technologies like DeepSeek’s and release its own open source and free Llama AI models that can also push the industry, Zuckerberg said.”I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time,” he said. “It’s possible that we’ll learn otherwise at some point, but I just think it’s way too early to call that, and at this point, I would bet that the ability to build out that kind of infrastructure is going to be a major advantage.”Zuckerberg also said that DeepSeek’s emergence validates Meta’s commitment to an open-source approach to AI, Zuckerberg said.”There’s going to be an open-source standard globally,” he said. “For our own national advantage, it’s important that it’s an American standard.”Watch: Meta beats on top and bottom lines.


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]]> https://www.digiteex.com/meta-wont-slow-ai-spending-despite-deepseeks-breakthrough/feed/ 0 4515 https://www.digiteex.com/meta-gains-after-zuckerberg-predicts-really-big-year-in-ai/ https://www.digiteex.com/meta-gains-after-zuckerberg-predicts-really-big-year-in-ai/#respond Thu, 30 Jan 2025 02:41:49 +0000 https://www.digiteex.com/meta-gains-after-zuckerberg-predicts-really-big-year-in-ai/ (Bloomberg) — Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg exuded confidence in his company’s artificial intelligence strategy, saying 2025 will be a “really big year” in which its AI assistant will become the most widely used in the industry. Most Read from Bloomberg “In AI, I expect that this is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people,” Zuckerberg said Wednesday on a call with investors following the company’s fourth-quarter earnings report. “And I expect Meta AI to be that leading AI assistant.” Zuckerberg told investors he believes Meta will eventually spend hundreds of billions on AI infrastructure, imitating and improving on the best technology presented by competitors to ensure its dominance. The remarks sent Meta shares up as much as 4.5% in extended trading after closing at $676.49 in New York. Earlier, a disappointing sales forecast for the current quarter had weighed on the stock. Zuckerberg has been using AI technology to transform how Meta’s business works, from the way advertising is targeted to the order of content that appears in its social networks, squeezing more value out of the social media business and its 3.35 billion daily users. That’s all meant to fund money-losing futuristic initiatives like virtual and augmented reality, as well as an expensive build out of AI infrastructure. Meta executives told investors Wednesday that this heavy investment is already paying off by making ad targeting more efficient. It also teased the idea of making money off its AI assistant at some point in the future, perhaps through subscriptions or sponsored responses, but reiterated that these options weren’t coming anytime soon. Earnings Results Meta gave an outlook for first-quarter sales of $39.5 billion to $41.8 billion. The midpoint missed the $41.7 billion average analyst estimate, according to data compiled by Bloomberg. The owner of Facebook and Instagram also reported fourth-quarter sales of $48.4 billion, beating the $47 billion that Wall Street expected on average. Advertising from Meta’s social networks, like Instagram and Facebook, continues to drive the vast majority of sales. Zuckerberg’s remarks came after Chinese AI startup DeepSeek released a model that it says was developed at a fraction of the cost and computing power of existing technology — news that caused US and European tech stocks to lose nearly $1 trillion in value Monday. Story Continues DeepSeek has done “a number of novel things,” Zuckerberg said. “They have advances that we will hope to implement in our systems — and that’s a part of the nature of how this works, whether it’s a Chinese competitor or not.” Like DeepSeek, Meta’s artificial intelligence technology, known as Llama, is open source, meaning it lets other companies access and build on top of it. Wall Street viewed the DeepSeek developments as a positive for Meta, and analysts suggested that the Menlo Park, California-based company could learn from its Chinese competitor and possibly bring AI costs down. Zuckerberg said he expects Meta will be able to reduce cost this year, adding that the company will focus on building “an AI engineering agent that has coding and problem-solving abilities of around a good mid-level engineer.” This assistant could then review code by Meta’s human employees, or write code and other technical fixes for its apps. “This is going to be a profound milestone and potentially one of the most important innovations in history,” he added. Some are more skeptical of Meta’s AI bet. Emarketer principal analyst Jeremy Goldman in a note on Wednesday said that DeepSeek’s latest model “threw a wrench in the works,” and potentially makes Meta’s AI spending look “bloated, not visionary.” Meta’s capital expenditures in 2024 were $39.2 billion, exceeding the $38.2 billion that analysts expected on average. Last week, Zuckerberg said in a Facebook post that the company would invest as much as $65 billion on AI-related projects in 2025, as well as its core business, which was well above estimates. Meta is spending big not just for AI, but also for a broader hardware push that requires upfront investment on products that may or may not take off. The Reality Labs devices group, which has lost tens of billions of dollars since 2019, reported sales that were in line with analysts’ estimates. Reality Labs is working on developing Oakley-branded smart glasses for athletes and plans to release new high-end glasses with a built-in display, Bloomberg reported this month. It also is testing new wearable devices such as watches and camera-equipped earbuds. Political Change Zuckerberg attributed much of his bullishness to President Donald Trump’s new administration and its favorable view of tech. “We now have a US administration that is proud of our leading companies, prioritizes American technology winning, and that will defend our values and interests abroad,” he said. “I am optimistic about the progress and innovation that this can unlock.” The CEO has made sweeping changes to the company since the start of the year, many of which have served to better align Meta with the new Trump administration. He elevated Joel Kaplan, a longtime Republican strategist, to chief global affairs officer and tapped Dana White, a Trump ally and CEO of the Ultimate Fighting Championship, for Meta’s board. Zuckerberg also announced plans to end US-based fact-checking on the company’s social networks, and changed the hateful conduct policy to allow more flexibility around “insulting language” aimed at immigrants and transgender people. He rolled back diversity and inclusion efforts, and moved members of Meta’s civil rights team to other parts of the company. While there was some concern that these changes might spook brand-conscious advertisers, Chief Financial Officer Susan Li assured investors during the earnings call that Meta hasn’t “seen any noticeable impact from our content content policy changes on advertiser spend.” Meanwhile, Zuckerberg has appeared alongside Trump and his allies. Earlier this year he visited Trump at his Florida club, Mar-a-Lago, and later joined the president at his inauguration, co-hosting a black-tie reception in Trump’s honor. Zuckerberg also went on The Joe Rogan Experience podcast in January, where he criticized the Biden administration and called for more “masculine energy” in corporate America. Meta on Wednesday also agreed to pay Trump $25 million to settle a claim by the President that Meta’s decision to suspend his accounts after the Jan. 6 riot at the US Capitol was illegal censorship. –With assistance from Kurt Wagner. (Updates throughout.) Most Read from Bloomberg Businessweek ©2025 Bloomberg L.P.


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]]> https://www.digiteex.com/meta-gains-after-zuckerberg-predicts-really-big-year-in-ai/feed/ 0 4507 https://www.digiteex.com/u-s-navy-bans-use-of-deepseek-ai-imperative-to-avoid-using/ https://www.digiteex.com/u-s-navy-bans-use-of-deepseek-ai-imperative-to-avoid-using/#respond Tue, 28 Jan 2025 23:20:36 +0000 https://www.digiteex.com/u-s-navy-bans-use-of-deepseek-ai-imperative-to-avoid-using/ Samuel Boivin | Nurphoto | Getty ImagesThe U.S. Navy has instructed its members to avoid using artificial intelligence technology from China’s DeepSeek, CNBC has learned.In a warning issued by email to “shipmates” on Friday, the Navy said DeepSeek’s AI was not to be used “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage.”A spokesperson for the U.S. Navy confirmed the authenticity of the email and said it was in reference to the Department of the Navy’s Chief Information Officer’s generative AI policy.The announcement followed DeepSeek’s release of its powerful new reasoning AI model called R1, which rivals technology from OpenAI. The DeepSeek model is open source, meaning any AI developer can use it. The DeepSeek app has surged to the top of Apple’s App Store, dethroning OpenAI’s ChatGPT, and people in the industry have praised its performance and reasoning capabilities.DeepSeek’s pronouncements rocked the capital markets on Monday due to concerns that future AI products will require less-expensive infrastructure than Wall Street has assumed. DeepSeek said in late December that its large language model took only two months and less than $6 million to build despite the U.S. curbing chip exports to China three times in three years. That’s a tiny fraction of the amount spent by OpenAI, Anthropic, Google and others.Shares of AI chipmakers Nvidia and Broadcom each dropped 17% on Monday, a route that wiped out a combined $800 billion in market cap. Those stocks led a 3.1% drop in the Nasdaq.The Navy’s warning landed days earlier.”We would like to bring to your attention a critical update regarding a new AI model called DeepSeek,” the email said. The memo said it’s “imperative” that team members do not use DeepSeek’s AI “for any work-related tasks or personal use.”The email was sent on Friday morning to the distribution list OpNav, which stands for Operational Navy, indicating it was an all-hands memo. The warning was based on an advisory from Naval Air Warcraft Center Division Cyber Workforce Manger.It said recipients were to “refrain from downloading, installing, or using the DeepSeek model in any capacity.”DeepSeek said on Monday it would temporarily limit user registrations “due to large-scale malicious attacks” on its services, before later resuming operations as usual.OpenAI CEO Sam Altman, accompanied by U.S. President Donald Trump, Oracle CTO Larry Ellison (R), and SoftBank CEO Masayoshi Son (2nd-R), speaks during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, DC. Andrew Harnik | Getty ImagesPresident Donald Trump, who took office last Monday, said the sudden rise of DeepSeek “should be a wake-up call” for America’s tech companies. Trump is currently trying to keep Chinese social media app TikTok alive in the U.S., after lawmakers determined that the service must be banned or sold due to national security concerns. Trump was in favor of banning TikTok in his first administration before flip-flopping on the matter.Venture capitalist David Sacks, Trump’s AI and crypto czar, posted on X on Monday that DeepSeek R1 “shows that the AI race will be very competitive,” adding that he is “confident in the U.S. but we can’t be complacent.” Meta, which has developed its own open-source models called Llama, started four DeepSeek-related “war rooms” within its generative AI department, The Information reported.Alexandr Wang, CEO of Scale AI, told CNBC last week that DeepSeek’s last AI model was “earth-shattering” and that its R1 release is even more powerful. He said it’s “roughly on par with the best American models” and described the race between the U.S. and China as an “AI war.” Wang’s company provides training data to key OpenAI, Google and Meta.Trump’s first big move in AI came last week, when his administration announced a joint venture dubbed Stargate between OpenAI, Oracle and SoftBank to invest billions of dollars in AI infrastructure in the U.S.WATCH: DeepSeek is another way China is undermining American players


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]]> https://www.digiteex.com/u-s-navy-bans-use-of-deepseek-ai-imperative-to-avoid-using/feed/ 0 4435