Shares of Micron Technology (MU) tumbled 5.03% in pre-market trading on Sunday, following reports that raised concerns about the future demand for AI chips and related memory products.
The sell-off was triggered by news of DeepSeek, a Chinese AI startup, releasing a powerful AI model that it claims cost only $6 million to build, using less-powerful chips. If true, this development could potentially undermine the demand for expensive AI chips and memory chips produced by companies like Micron.
Analysts have warned that DeepSeek's progress could spell trouble for Nvidia and other AI stocks, as it raises questions about the computing power needed to develop AI systems. This, in turn, could impact the demand for Micron's high-bandwidth memory (HBM) chips, which are widely used in AI accelerators and data centers.
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