During the Chinese New Year period, the Chinese artificial intelligence company DeepSeek emerged, and its latest large language model DeepSeek-V3 outperformed OpenAI's GPT-4o, Meta's Llama 3.1, and Anthropic's Claude Sonnet 3.5 in third-party benchmark tests, shocking the market.
Furthermore, DeepSeek claimed that DeepSeek-V3 was built at a cost of less than $5.6 million, a significant breakthrough in cost-effectiveness compared to the tens of billions or even hundreds of billions of dollars spent annually by companies like OpenAI, Google, and Microsoft on model training.
This event has also overturned the market's ingrained notion of the high cost of training models, triggering a panic sell-off in the US stock market, with Nvidia plunging 17% in a single day, and other tech stocks also suffering heavy losses.
Legendary Short Seller: The Biggest Market Risk is DeepSeek, an Unpredictable Product
Against this backdrop, according to a Bloomberg report, the famous short-seller and founder of Chanos & Company, Jim Chanos, stated in an interview with Bloomberg that the biggest risk facing the US stock market in the next 6 to 12 months will be unpredictable events, such as last month's DeepSeek collapse:
The real risk will come from events like DeepSeek that come out of nowhere and upend market assumptions. By definition, these are risks we cannot predict.
Chanos then pointed out that while there are signs of speculative bubbles in the market, they have not yet reached the level of craziness seen in 2021 when the S&P 500 index rose 27%. Therefore, he believes that investors at this stage need to be able to distinguish the correct valuation of companies:
If we can't tell the difference between high and low valuations, capitalism is dead. You shouldn't be putting money into Enron or Theranos, but into companies like Amazon.
The Current Market is Affected by Political Factors
In addition to the DeepSeek incident, Chanos believes that the current market is being influenced by political factors, and this influence may intensify in the future. He is particularly concerned about the tariff policies proposed by former US President Trump, especially the plan to impose a 10% tariff on China:
A 10% tariff may not be enough, and if the US government really wants to generate significant revenue, it will need to significantly increase tariffs on China and the EU. However, we haven't seen such action yet, and it remains to be seen what will happen in the next 30 or 60 days, whether it will escalate.
Shorting 'Enron' Made Him Famous, but His Predictions Have Been Consistently Off
We know that in 2001, the financial market was rocked by the largest accounting fraud case in history, the 'Enron scandal', which led to the collapse of the Enron Corporation, and Jim Chanos was made famous for shorting Enron's stock in advance.
However, Bloomberg points out that Chanos' investment decisions in recent years have been at odds with market trends. For example, he has shorted Tesla for five consecutive years, but has missed out on the stock's meteoric rise. Furthermore, he also shorted the data center industry in 2022, which has become one of the biggest beneficiaries of the AI wave.
Therefore, despite his impressive track record in the past, investors still need to consider multiple factors when making judgments.
