WSJ Tech News Briefing: Tech Stocks Tumble on China’s DeepSeek AI News

Release Date: January 27, 2025
Host: Julie Chang, The Wall Street Journal

Introduction

In this episode of the WSJ Tech News Briefing, host Julie Chang covers a significant downturn in tech stocks triggered by China's DeepSeek AI news. The briefing delves into the market repercussions, exclusive startup announcements, and notable funding developments shaping the tech landscape today.

Tech Stocks Decline Amid DeepSeek's AI Cost Efficiency Claim

DeepSeek's Cost-Efficient AI Model Shakes the Market

The episode begins with a startling announcement from Chinese artificial intelligence company DeepSeek, which claimed to have trained an AI model at a fraction of the cost incurred by its Silicon Valley counterparts. This revelation sent shockwaves through the tech industry, leading to a substantial decline in major tech stocks.

"Tech stocks tumbled today after Chinese artificial intelligence company Deepseek said it trained an AI model at a fraction of the cost of its Silicon Valley rivals."
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Nvidia Takes the Biggest Hit

Nvidia, a cornerstone in the AI hardware sector, experienced a dramatic 17% drop in its share price following DeepSeek's announcement. This plunge wiped out approximately $593 billion from Nvidia's market value, highlighting the market's intense sensitivity to advancements in AI cost-efficiency.

"Nvidia shares fell 17%, wiping out about $593 billion from the company's market value."
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Nvidia's chips are pivotal in powering many leading AI models, making the company's stock particularly vulnerable to competitive pressures and breakthroughs in cost reduction by rivals like DeepSeek.

Broader Market Impact

The repercussions extended beyond individual companies, affecting major stock indices. The tech-heavy NASDAQ slid more than 3%, the S&P 500 sank 1.5%, while the Dow Jones Industrial Average, less weighted towards big tech, remained relatively stable with no significant change for the day.

"The tech heavy NASDAQ slid more than 3%. The S&P 500 sank 1.5%. The Dow Jones Industrial Average, which is less weighted towards big tech, gained zero point."
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This divergence underscores the concentrated impact of AI advancements on the technology sector compared to the broader market.

Exclusive: Reid Hoffman and Siddhartha Mukherjee Launch Manas AI

Partnership Formation and Funding

In an exclusive development, LinkedIn co-founder Reid Hoffman is partnering with renowned cancer researcher Siddhartha Mukherjee to launch an AI-driven drug discovery startup named Manas AI. The venture is backed by an impressive initial funding of $24.6 billion.

"Reid Hoffman is teaming up with cancer researcher Siddhartha Mukherjee on an AI drug discovery startup. The company, Manas AI, is launching with $24.6 billion of initial funding."
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Investment Leadership and Collaborators

Hoffman led the funding round, securing investments from the venture capital firm General Catalyst. Additionally, Greylock, the VC firm where Hoffman previously served as a general partner, is also contributing to the funding. This substantial financial backing reflects strong confidence in the potential of AI-driven solutions in the medical field.

"Hoffman led the funding round with venture capital firm General Catalyst. Greylock, the VC firm where Hoffman was once a general partner, is also investing."
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Focus Areas and Technological Infrastructure

Manas AI will primarily focus on developing treatments for breast cancer, prostate cancer, and lymphoma. By leveraging advanced AI models, the startup aims to accelerate drug discovery processes, potentially revolutionizing cancer treatment methodologies.

The company will utilize AI systems housed in data centers owned by Microsoft, where Hoffman serves on the board of directors, ensuring robust infrastructure support and seamless integration of cutting-edge technologies.

"The startup will run its AI systems data centers owned by Microsoft, where Hoffman is on the board of directors."
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Maricor Achieves $2 Billion Valuation in Latest Funding Round

Company Overview and Growth

Maricor, a recruiting startup specializing in matching experts from fields such as law and medicine with contract roles at AI companies, has successfully raised new funding, elevating its valuation to an impressive $2 billion. This marks a significant increase from its previous valuation of $250 million just a few months ago.

"Recruiting startup Maricor has raised new funding at a $2 billion valuation."
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"It was valued at $250 million a few months ago."
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Role in Generative AI Development

Maricor plays a crucial role in the development of generative AI models by providing specialized talent to AI companies. By facilitating the deployment of experts in necessary fields, Maricor ensures that AI initiatives are supported by the requisite domain knowledge, thereby enhancing the quality and effectiveness of generative AI applications.

"The company helps match experts in fields such as law and medicine with contract jobs at AI companies to help develop generative AI models."
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The substantial increase in valuation underscores Maricor's pivotal role in the AI ecosystem and the growing demand for specialized expertise in driving AI innovation.

Conclusion

Today's WSJ Tech News Briefing highlighted the volatility in tech stocks influenced by international advancements in AI, showcased groundbreaking collaborations at the intersection of technology and healthcare, and emphasized the dynamic growth within the tech recruiting sector. For those seeking a more comprehensive analysis of these developments, Julie Chang recommends tuning into Tuesday's episode of the Tech News Briefing podcast.

"For a deeper dive into what's happening in tech, check out Tuesday's Tech News Briefing podcast."
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Stay informed with the Wall Street Journal for the latest insights and updates in the ever-evolving tech landscape.