Steve Cohen: “DeepSeek is Optimistic Upgrade of the Artificial Intelligence”. Why?

The Sell-Off in U.S. Stocks at the Start of the Week, Fueled by Concerns Over AI Costs, Hasn’t Shaken Steve Cohen’s Confidence in the Transformational Potential of the Technology.

Billionaire and founder of Point72 Asset Management, Steve Cohen, believes that the creation of the Chinese startup DeepSeek could accelerate AI development, despite investor concerns about the costs associated with building new AI technologies. “Our view is that what happened with DeepSeek is actually a bullish signal because it accelerates the transition to artificial superintelligence,” Cohen said on Tuesday at the iConnections Global Alts conference in Miami Beach. “And it’s coming, and it’s coming fast.”

U.S. stocks regained some of their losses on Tuesday after the technology sector suffered a significant decline the day before due to concerns that major U.S. companies had invested too heavily in AI development, given DeepSeek’s low-budget approach. The Nasdaq 100 rose by 1.6%, while shares of Nvidia Corp. surged by about 9%, recovering part of their record loss from the previous day, the largest market value drop in history.

Cohen emphasized that AI is a long-term investment theme that will evolve over the next 10 to 20 years, and investors will make a mistake if they ignore it. Speculation is rising that Point72 is raising capital for a new hedge fund focused on artificial intelligence. The plan is for the fund to bet on both the rise and fall of AI hardware and semiconductor companies globally. “This is such a dramatic and important change that to ignore it would be a mistake,” said Cohen. “That’s why we decided to create a separate investment fund with a longer-term horizon.”

Market Uncertainty in 2025

Despite his bullish long-term outlook on AI, Cohen expects turbulence in the stock markets over the coming months, predicting a slowdown in economic growth and persistent inflation. “I don’t think this is a good environment for 2025,” he said. “I expect markets to peak in the next few months, if they haven’t already, and the second half of the year will be more difficult.”

The next big challenge for financial markets will be the upcoming earnings reports from the big tech companies. This week marks the beginning of the earnings season for the “Magnificent Seven,” with Microsoft Corp., Meta Platforms Inc., and Tesla Inc. set to release their financial results. At the same time, the Federal Reserve will hold a meeting, where it is expected to keep interest rates unchanged while providing guidance on future interest rates and inflation.

Cohen stepped back from active trading at Point72 Asset Management last year but continues to serve as co-founder and investment director.