Asked about China’s DeepSeek AI, Google CEO Sundar Pichai asserted that while the team behind the Chinese AI model is “tremendous,” and doing “very good work,” Google’s models “are some of the most efficient models out there,
Alphabet Inc, the parent company of Google, suffered an erosion of a whopping $211 billion in market valuation on Wednesday, the single largest one-day decline in the company’s history, as its stocks fell by 8%, marking the tech giant’s biggest percentage loss October 2023. Google’s fall comes weeks after chipmaking giant Nvidia suffered a similar fate following the release of DeepSeek R1, China’s revolutionary AI model, which has turned the AI sector on its head.
Google stock tumbled despite the company’s earnings beating Wall Street expectations, but falling short on revenue. The tech titan’s downturn comes amid its announcement to increase spending on AI initiatives, despite a deceleration in revenue growth.
Market experts believe that the stock sell-off reflects growing investor apprehension regarding the escalating AI expenditure among major US tech firms, a concern that has surged after a Chinese startup unveiled the DeepSeek R1, a powerful AI model built for under $6 million, and without utilizing Nvidia’s top-tier hardware.
The revelation by DeepSeek has raised questions about the efficiency and necessity of the massive AI investments being made US firms like Google, Microsoft and OpenAI, they said.
Google announced $75 billion AI investment
Earlier, during the company’s earnings call. Google CEO Sundar Pichai announced plans for a staggering $75 billion in capital expenditures for 2025, a massive jump from the $52.5 billion spent in the previous year.
According to reports, the gargantuan investment by Google is primarily directed towards bolstering its AI capabilities and infrastructure. “We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025,” Sundar Pichai said in the earnings release.
Sundar Pichai on DeepSeek
Asked about China’s DeepSeek AI, Sundar Pichai asserted that while the team behind the Chinese AI model is “tremendous,” and doing “very good work,” Google’s models “are some of the most efficient models out there, including comparing to DeepSeek’s V3 and R1.”
Google, along with other US Big Tech companies, including Microsoft, Facebook parent Meta, and Amazon, are making gigantic investments in developing AI infrastructure, as they compete with each other, as well as Chinese tech firms to develop cutting-edge AI models.
