Quality Investing with René Sellmann

Quality Investing with René Sellmann

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Quality Investing with René Sellmann
Quality Investing with René Sellmann
DeepSeek & The Race to Zero: How AI Will Become a Zero-Cost Commodity (and What It Means for Big Tech)
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DeepSeek & The Race to Zero: How AI Will Become a Zero-Cost Commodity (and What It Means for Big Tech)

Thoughts on The Stickiness of AI Products and the Accelerated Commoditization of AI

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Rene
Jan 27, 2025
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Quality Investing with René Sellmann
Quality Investing with René Sellmann
DeepSeek & The Race to Zero: How AI Will Become a Zero-Cost Commodity (and What It Means for Big Tech)
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Morgan Housel tweeted today: “The most interesting part of new technology is realizing that no one has any idea what happens next.”

That quote perfectly encapsulates where we stand with AI today. Everyone and their mother has an opinion on the implication of the recent DeepSeek news, but honestly, almost everyone will be dead wrong.

The future of the AI race, the economics of AI business models, and the billion-dollar bets made by big tech are all up in the air.

Skepticism about these investments grows by the day, and we’re left wondering: who will win the AI race, and at what cost?

As I just highlighted, skepticism is growing rapidly whether Big Tech can/will earn a satisfying return on their major investments and the rapid rise of DeepSeek has confirmed what many have speculated for a while: the AI landscape is in the midst of a race to zero.

This is reflected in today’s market reaction. As of today, the Nasdaq is down almost 4%, Nvidia is down around 16%, and there’s chatter about a broader sell-off in tech.

It’s easy to get caught up in the noise, to stare at your portfolio’s performance today and feel shaken. But let me offer a different perspective: resist the urge to check your portfolio value. Instead, think about what these developments mean for the businesses you own. That’s what I’m attempting to do in this postas a Meta, Google and Amazon shareholder—step back and think.

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