A new AI model has injected fears for the future of the world’s leading semiconductor companies. But some say the innovation of Chinese start-up DeepSeek doesn’t necessarily spell disaster for the current industry. Taiwan, which is a global leader in chip manufacturing, has a huge stake in the answer to this question.
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00:00Sending shockwaves through the tech world, a new AI model released by a Chinese startup called DeepSeek,
00:06attracting attention because of how it was made and how cheaply.
00:10DeepSeek's new chatbot rivals those of industry giants like OpenAI or Google.
00:15But the company says it was created with less advanced and fewer microchips, at a fraction of the cost,
00:21suggesting the most advanced microchips are not as crucial to AI as once thought.
00:26This breakthrough caused shares in US tech giant Nvidia, whose chips are central to many AI systems, to drop by over 17%.
00:34And it's also raised questions about the future of the chip industry as a whole.
00:38But amid concerns within the tech world, some experts are arguing a move towards cheaper and more efficient AI models like DeepSeek's
00:46does not mean demand for high-end semiconductors will decrease.
00:50So I think this is great for the whole community because once you know that you can train something more efficiently,
00:56you can do a couple of different things.
00:58One is you can do more experiments, which means you can explore more possibilities of what you would like the model to do.
01:05And so what I expect is going to happen is that despite what we've seen on the stock market with like the Nvidia stock,
01:11it's likely going to be a future where there's an even greater demand for AI applications and therefore for chips.
01:18Because once you are more efficient, you can then just run more things.
01:22Others say chips could also be repurposed, used to strengthen the ability of AI to answer questions.
01:28In most cases, the money that is being spent to build out the data centers that will handle these giant training runs can be repurposed.
01:38The same servers and chips that you would use to do that can also be used to serve what is called inference.
01:45So basically actually answering the questions.
01:48So as more and more people start to use AI, it will be those giants that actually have the capacity to serve those queries.
01:56They will be able to build businesses around that.
02:00In Taiwan, there are fears for TSMC, which makes around 90% of the world's most advanced chips and is a key driver of the national economy.
02:09Yet one column in the Wall Street Journal says the company could actually benefit from AI becoming more efficient and accessible,
02:15especially if it's used in more consumer devices like smartphones.
02:19And one Taiwanese expert is even arguing that this breakthrough could deepen U.S. ties with Taiwan as it competes with China in the AI industry.
02:27U.S. President Donald Trump in recent days has emphasized the need for U.S. companies to compete.
02:33The release of deep-seek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win
02:44because we have the greatest scientists in the world.
02:46Even Chinese leadership told me that.
02:49But Trump has also accused Taiwan of stealing the U.S.'s chip industry
02:53and has said he plans to place tariffs on imports to encourage more domestic production,
02:58telling House Republicans that he may impose 25%, 50%, or even 100% tax on Taiwan's chips.
03:05For now, questions remain about how deep-seek's breakthrough will affect the AI industry, demand for high-end chips,
03:11the semiconductor industry as a whole, and Taiwan specifically, with many keeping a close eye on developments.
03:18Kama Xu and Cadence Cuaranta for Taiwan Plus.