On analyst calls this week, executives have increasingly been fielding questions about the Chinese AI and what it means for their businesses.
The name DeepSeek was mentioned in at least nine earnings calls this week, according to an AlphaSense search, with only a single mention before Monday’s bombshell announcement.
But in spite of the market disruption that saw wild swings in Big Tech share prices, the early outlook is generally optimistic about the tech.
On Monday, AT&T CEO John Stankey said the newer, lower-cost AI “is going to open up and facilitate new applications and business models.”
Here’s what business leaders are telling analysts:
AT&T
AT&T CEO John Stankey says lower-cost AI will lead to new business models.Kena Betancur/VIEWpress/Getty Images
“This is a seminal technology cycle,” CEO John Stankey said Monday of generative AI. “It’s going to be every bit as big as the founding of the Internet when it’s all said and done.”
Stankey added that new breakthroughs like DeepSeek that use less processing capacity, consume less power, work more effectively in particular domains, or can be run on local devices instead of in the cloud will ultimately lead to new applications and business models.
“We’re all going to have to stay on our game to make sure we use it effectively so none of us are in a disadvantaged position relative to our competitors on cost-structure effectiveness,” he said.
Flex
Flex CEO Revathi Advaithi said DeepSeek will likely boost demand for data services.Jetta Productions Inc/Getty Images
Revathi Advaithi, CEO of mid-cap datacenter company Flex, acknowledged “a lot of noise this week,” but said DeepSeek itself doesn’t represent anything new in terms of demand for AI infrastructure.
“At the end of the day, compute density is still a big deal,” she said. “We think lower cost in applications like DeepSeek is a good thing for the industry as a whole because it’s going to drive a stronger growth in terms of the market itself.”
In addition, Advaithi said lower barriers to entry could spur more widespread innovation in AI, driving additional demand for infrastructure providers like Flex.
“We haven’t seen enough growth from non-Mag Seven companies and we’ll start to see a lot more of that,” she said. “It actually accelerates the move towards AI.”
Corning
Corning CEO Wendell Weeks said better AI models will still need improvements in communication tech.Manuela Schewe-Behnisch / EyeEm/Getty Images
Wendell Weeks, CEO of glassmaker Corning, which produces fiber optics that are increasingly critical in high-speed networking, said the technical community has been watching DeepSeek for the last few months.
“What’s super important to understand is that we need dramatic improvement in training and inference cost to make GenAI into a highly sustainable business model, and more importantly, the productivity driver that we all hope it will be,” he said.
“All of us in the space are counting on many more innovations to come,” he continued, adding that AI models of the future will continue to need improvements in computation and communication technologies.
Microsoft
Microsoft CEO Satya NadellaAdek Berry/AFP via Getty Images
Microsoft CEO Satya Nadella mentioned DeepSeek twice in his prepared remarks during an earnings call on Wednesday.
He said that the Copilot+ PC laptops, which Microsoft has called the “fastest, most intelligent Windows PCs ever built,” would soon be able to run DeepSeek’s R1 distilled models locally.
When asked about DeepSeek by an investor, he said, “I think DeepSeek has had some real innovations. And that is some of the things that even OpenAI found in o1.”
Meta
Meta CEO Mark ZuckerbergJonathan Raa/NurPhoto via Getty Images
Meta CEO Mark Zuckerberg acknowledged DeepSeek as a “new competitor” during an earnings call on Wednesday. An investor asked him about the competitive dynamic in the open-source field.
“In light of some of the recent news, you know, the new competitor, DeepSeek from China, I think it’s also one of the things that we’re talking about, is there’s going to be an open-source standard globally, and I think for our own national advantage, it’s important that it’s an American standard,” Zuckerberg said to investors.
He added that the emergence of DeepSeek has “only strengthened our conviction that this is the right thing for us to be focused on.”
Later in the call, he said that DeepSeek did “a number of novel things” to train its model fast and cheaply, which Meta was “still digesting.” He added that DeepSeek has made advances that Meta hopes to implement in its systems.
IBM
CEO Arvind Krishna said DeepSeek was a “point of validation” for IBM.Illustration by Piotr Swat/SOPA Images/LightRocket via Getty Images
IBM’s CEO Arvind Krishna fielded a DeepSeek question during an earnings call on Wednesday.
When asked about what implications DeepSeek could have for IBM or the industry at large, Krishna said, “Look, DeepSeek, I think, was a point of validation.”
“We have been very vocal for about a year that smaller models and more reasonable training times are going to be essential for enterprise deployment of large language models,” he said.
The tech giant’s chief added that IBM has been going “down that journey” itself “for more than a year” and that it has seen “as much as 30 times reduction in inference costs” with those approaches.
“As other people begin to follow that route, we think that this is incredibly good for our enterprise clients,” Krishna said.
