Andrew Curtayne: Milford Asset Management expert on stocks bouncing back following DeepSeek debacle

Over in the US, tech stocks have picked up again after a 3 percent selloff after Chinese startup DeepSeek caused a storm in the AI industry.

The stocks took a dive earlier in the week after DeepSeek stunned the tech world by revealing it could compete with US counterparts at a fraction of the cost.

Milford Asset Management's Andrew Curtayne explains what this means for the wider world of AI.

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Let's got to Andrew Curtaine, Milford Asset Management. Andrew, good evening.

Speaker 2 (00:03):
Hi, Right, how are you? Yeah?

Speaker 1 (00:05):
Really well, thanks, good to have you on the show.
Tech stocks the kind of coloring back half their losses today.

Speaker 2 (00:12):
Yeah, that's right. We had one point five percent rally
in the Nasdaq, which is against the three percent full yesterday.
What's what's sort of going on today is people starting
to learn a little bit more about this Chinese company,
Deep Seek, which is an AIA model company and came
up yesterday announced and it had models almost as good
as chat GBT, sort of the leading model player. But

(00:34):
people now starting to learn that, you know, maybe this
is actually good for the AI industry. Maybe this is
good for the overall market because if you've got sort
of fast improvements in AI model efficiencies, that means everyone's
going to be able to access generative AI earlier and
at a lower cost points. So so really the market's

(00:55):
starting to consider is this a positive thing?

Speaker 1 (00:57):
Who's most affected by the I'm talking negative here. Who's
most affected by this are the tech firms?

Speaker 2 (01:04):
Yeah, we think the big loser is the unlisted company
open Ai. This is a company that owns chet GBT,
it's sort of considered the model or the AI model
leader at the moment in the world, and deep seek
is now showing that with you know, actually a lot
lot lower cost people talking about between ten to twenty
times lower cost. Is built a model which is which

(01:26):
is almost as good or as good as chet GPT.
So they're sitting their loser, they'll be they'll be panicking
at the moment and trying to sort of work out
what to do the next Probably the next biggest loser
or the company that say has got a higher risk
level now is Nividia. So Nibvidia benefits from selling a
lot of high performance chips to companies like open Ai. Now,

(01:47):
if you've just made models more efficient, you don't necessarily
need as many of these chips, So Navidia is, let's say,
the risk that people might not be buying as many
of these chips from Nividia has gone higher. We'll get
a bit more color from this, and we have Microsoft
and Meta Results reporting tomorrow morning, and they should talk
a little bit about sort of outlook for CapX, which
basically means how many chips are they going to buy

(02:08):
from Nvidia.

Speaker 1 (02:09):
It's interesting because what Donald Trump's reaction has been is like, well,
this is great for competition. We should have been on
the ball with this. China's actually doing something right here,
and I guess they'll now be looking at deep Seak
as they did with TikTok for national security concerns.

Speaker 2 (02:25):
That's right. There's actually announcement overnight from the White House
who came out and said that the National Security Council
is reviewing the implications of deep Seek. And they've also said,
and Trump's been saying this the last couple of days,
that it's a wake up call to the American AI industry.
So put this in context. Trump is really pro American

(02:46):
AI leadership. He wants America to dominate the AI industry,
so he's going to do everything he can to make
sure America maintains this leadership.

Speaker 1 (02:55):
And here at home, the only real big mover was infertil.

Speaker 2 (03:01):
The inperto was down four percent yesterday, down I think
another one and a half percent or so today. The
reason for that is in Fortool's largest investment is a
data center company called CDC. So you know, same sort
of theory with Navidia having high levels of risk, but
maybe there's going to be less growth in data centers
overcoming years. But you know, it's hard to tell us

(03:22):
early stages. CDC sort of very good business and he's
doing well, so the market's kind of racked in first
and probably digestive information.

Speaker 1 (03:29):
Good on it. Great to have you on the show, Andrew.
Andrew Curtaine, Milford Asset Management.

Speaker 2 (03:36):
For more from Heather Duplessy Allen Drive, listen live to
news talks. It'd be from four pm weekdays, or follow
the podcast on iHeartRadio.