Time to ‘panic’ or ‘overblown’? Wall Street weighs how DeepSeek could shake up the AI trade

AI stocks fell across the board Monday as the investment community absorbed news of a potentially more cost-effective Chinese AI model — and began to question the Western world’s gargantuan spending on AI infrastructure.

Chinese AI startup DeepSeek released a new generative AI model called R1 last week aimed as a competitor to OpenAI. Analysts have cited DeepSeek’s models as more cost-effective, as DeepSeek said recently that it spent just $5.6 million to train another one of its…