C3.ai, Inc. (NYSE: AI) stock plummeted 5.48% in intraday trading on Wednesday, as investors grappled with concerns over the potential impact of the new Chinese AI model DeepSeek R1 and proposed legislation aimed at restricting U.S.-China cooperation in the AI sector.
The sell-off in C3.ai shares comes as the broader AI industry faces heightened uncertainty following the debut of DeepSeek R1, a potentially disruptive new artificial intelligence model from a Chinese company. Reports suggest that R1 was created and trained with far less advanced hardware than OpenAI's ChatGPT, yet requires significantly less processing power and cooling, allowing DeepSeek to offer commercial services at a fraction of the cost.
This development has raised concerns about the competitive positioning of U.S. AI companies, including C3.ai, against their Chinese counterparts. Adding to these worries, Sen. Josh Hawley has proposed legislation that would ban U.S. investment in Chinese AI initiatives and sever all development cooperation between the two countries, highlighting the precarious regulatory environment for AI firms.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.