Matt Levine, Columnist

Hedge Fund AI Is Cheap AI

DeepSeek, AI services rollups, QXO goes hostile, trading goes dark and X loans are offered at 90-95.

January 27, 2025 at 7:30 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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The big news today is that DeepSeek blew up the stock market:

DeepSeek’s model is open-source and apparently cheap, and it would honestly be pretty amazing if artificial general intelligence came in that package. (No thanks to OpenAI’s former nonprofit work building artificial general intelligence for the benefit of humanity!) The ideal case for AI would be something like “everyone has a magic lamp in their pocket with a genie that can grant unlimited wishes; the lamp is cheap and each wish is free.” That case would be extremely good for human flourishing (maybe?1), but terrible for stock market valuations. What do you need Nvidia chips for, if the genie is free? What do you need your 401(k) for, if the genie is free? Sort of a good news, bad news situation.