DeepSeek Broke Wall Street’s AI Mania Fever
When kicking off the brainstorming session for this essay, my intention was to talk about tariffs. Wall Street had one of its worst two-day performances in history this past Thursday and Friday. The level of fear and unknown in the market rivals the early days of the pandemic. However, something else had been nagging me. Big Tech stocks had been acting strangely prior to the significant market cap losses experienced last week. Back in December 2024 and this past January, the surprise announcements from DeepSeek had a much larger psychological impact on Wall Street than consensus wanted to admit. Last week’s tariff news revealed how DeepSeek had already broken Wall Street’s AI mania fever.
This past Friday, Treasury Secretary Scott Bessent made waves by saying that Big Tech’s market rout one day prior wasn’t driven by tariff angst but rather carryover from DeepSeek. At a glance, Bessent’s comment seemed preposterous.
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