Billionaire investor Bill Ackman questioned whether DeepSeek‘s hedge fund affiliate potentially profited from Monday’s tech stock rout, which saw Nvidia Corp. NVDA shares plunge 17% following the Chinese artificial intelligence startup’s emergence as a potential disruptor.
What Happened: “What are the chances that Deepseek AI’s hedge fund affiliate made a fortune yesterday with short-dated puts on Nvidia, power companies, etc.?” Ackman wrote Tuesday on X, formerly Twitter. “A fortune could have been made.”
DeepSeek, which emerged from High-Flyer, an $8 billion Chinese quantitative hedge fund co-founded by Liang Wenfeng, according to The Wall Street Journal, sparked market concerns after announcing its R1 AI model could match OpenAI‘s performance at significantly lower costs without using advanced chips.
The announcement triggered a broader tech selloff that erased approximately $1 trillion in market value. Companies like Meta Platforms Inc. META and Alphabet Inc. GOOGL GOOG also saw significant declines as investors questioned the massive AI infrastructure investments by U.S. tech giants.
Ackman, through his hedge fund Pershing Square Capital Management, holds a significant stake in tech giants such as Google parent Alphabet, according to 13F filings with the U.S. Securities and Exchange Commission.
High-Flyer and DeepSeek did not immediately respond to Benzinga's request for comment.
Why It Matters: OpenAI CEO Sam Altman acknowledged R1 as “an impressive model, particularly around what they’re able to deliver for the price,” on X, announcing plans to accelerate some product releases in response.
Nvidia defended its position, stating that DeepSeek’s operations “requires significant numbers of Nvidia [chips] and high-performance networking.”
DeepSeek’s success using lower-cost chips raises questions about U.S. export controls on advanced semiconductors to China, suggesting either their ineffectiveness or the possibility of alternative technological approaches in AI development.
The privately-held Chinese company’s R1 model, released as open-source software, allows other companies to adapt it for their use, potentially accelerating the democratization of AI technology beyond traditional tech giants.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors
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