Vertiv Holdings LLC (VRT), a leading supplier of data center cooling infrastructure, saw its stock plummet by around 20% in pre-market trading on Monday. The sharp decline was triggered by concerns over a Chinese artificial intelligence company called DeepSeek, which claimed to have trained a large language model capable of matching ChatGPT's performance at a fraction of the cost incurred by Silicon Valley's tech giants.
Vertiv Holdings provides critical infrastructure solutions for data centers, including cooling systems and power management solutions. As the demand for AI and data processing capabilities continues to grow, companies like Vertiv have benefited from the increasing need for robust and efficient data center infrastructure. However, DeepSeek's claims have raised doubts about the future growth prospects of the AI supply chain.
If DeepSeek's low-cost model proves viable, major technology companies like Microsoft, Amazon, and Alphabet may have overinvested in AI, potentially reducing the demand for products and services offered by companies like Vertiv. The news sparked a broad selloff in AI-related stocks, with semiconductor companies, data center infrastructure providers, and energy companies that benefit from increased energy demand for AI data centers all facing significant declines.
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