The recent launch of DeepSeek, a groundbreaking AI model from China, has sent shockwaves through the global stock markets. With its impressive capabilities and cost efficiency, DeepSeek has quickly become a significant competitor to established Western technologies like OpenAI’s ChatGPT. Nvidia—a major supplier of AI hardware—saw a historic 17% drop in its stock value, wiping out nearly $593 billion in market capitalization. Other tech giants, including Microsoft, Meta, and Alphabet, also experienced sharp declines.
This market reaction reflects investors’ growing awareness of a shifting AI landscape. DeepSeek’s success has upended assumptions that only large-scale investments and resource-heavy approaches can produce cutting-edge AI advancements.
But in the middle of all this turmoil, some companies—notably application vendors like SAP—have remained steady. The markets know where the real value lies: not in the models themselves, but in how they are applied.
The Value of Application, Not Models
DeepSeek’s rise is a reminder that while AI models are essential, their transformative potential depends on practical implementation. Application vendors like SAP understand this. Our focus is on embedding AI into solutions that address real-world problems, streamline processes, and deliver measurable business outcomes—with an open, flexible approach to which underlying models are used with SAP Business Technology Platorm. The lesson is: to avoid the market volatility impacting pure technology players, focus on customer-centric approaches.
SAP’s steady valuation suggests that enterprises value solutions over raw technology. AI models, no matter how advanced, are only tools (see AI is like Electricity). Their true worth emerges when they are integrated into workflows, enhance decision-making, or unlock efficiencies. Companies like SAP have demonstrated that the endgame isn’t owning the flashiest model, but rather delivering results that matter to customers.
Lessons for the Industry
The DeepSeek story might not be good for tech investors, but it’s great news for most businesses, showing that we can all use AI to do much more with much less than anybody realized.
But while breakthroughs in AI are exciting, success ultimately hinges on operationalizing these technologies. Vendors that can harness AI to solve specific problems will continue to thrive, regardless of shifts in the competitive landscape. Meanwhile, the companies focusing solely on the arms race of model development may face diminishing returns if they fail to connect their innovations to practical applications.
In the end, DeepSeek’s emergence isn’t just a challenge—it’s an opportunity. By focusing on application and execution, companies can ensure they’re delivering the kind of value that no stock market fluctuation can erode.
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