DeepSeek and the Jevons Paradox: What It Means for AI Infra Spending, Efficiency
2025.02.03 10:49
Nvidia’s (NASDAQ:) market cap dropped, DeepSeek continues to disrupt, and European banks outperformed the Mag 7. Here are the last seven days in seven charts.
1. $590 Billion Dollars of Nvidia Market Capitalization Erased in One Day
On Monday, Nvidia experienced the largest single-day market cap drop in stock market history. In fact, it holds the top spot for the six biggest single-day losses ever recorded.
However, the stock managed to recover part of these losses over the course of the week.
Source: Bloomberg
2. Will US Tech Giants Continue Their Huge Spending Spree On AI Hardware & Infrastructure with the Rise of DeepSeek?
AI hardware and infrastructure have been the biggest winners of the AI boom, with Microsoft (NASDAQ:), Amazon (NASDAQ:), Oracle (NYSE:), Google (NASDAQ:), Meta (NASDAQ:), and others pouring in massive investments. But with the rise of DeepSeek and other smaller models, these key questions emerge:
- Will these tech giants stick to their spending forecasts?
- How will they justify such investments after DeepSeek’s release?
- Could the perceived value shift up the chain toward applications instead?
Source: Deutsche Bank thru Ali Dhanji @DhanjiatRJ on X
3. The Jevons Paradox
Following DeepSeek’s industry-shaking debut, which erased nearly $600 billion from Nvidia’s market cap in a single day, one phrase has become essential in the DeepSeek discourse: Jevons Paradox. Interest in the concept has surged, with traffic to its Wikipedia page skyrocketing this week.
As that very page explains: “the Jevons paradox occurs when technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application), however, as the cost of using the resource drops, overall demand increases causing total resource consumption to rise.”
Source: Chartr
4. European Banks Are Outperforming the Mag 7
Can you believe it? While technology grabs many headlines, European banks have outperformed the Mag 7 over the past two years.
Source: Goldman Sachs
5. What Is Happening with the Eurozone Economy?
and saw their GDP shrink by 0.2% and 0.1%, respectively, in Q4 2024, while Italy’s remained flat for the second straight quarter. As a result, the Euro-area economy failed to grow in the final quarter of 2024.
It is worth noting that Germany has now contracted for two consecutive years in 2023 and 2024.
Source: Bloomberg
6. Top 10 Countries Attracting Millionaires in 2024
The United Arab Emirates (UAE) tops the list, attracting 6,700 millionaires, followed by the United States with 3,800 and Singapore with 3,500. Canada welcomed 3,200, while Australia saw 2,500 arrivals. Italy drew in 2,200, Switzerland 1,500, and Greece 1,200. Portugal brought in 800, with Japan closing out the top ten at 400.
Wealth migration underscores the UAE as a prime destination, with other nations vying for a share of the world’s affluent movers.
Source: @Globalstats11, MarioNawfal
7. The Most Dramatic Energy Chart You’ll Ever See
While the world debates artificial intelligence and races to plant a flag on Mars, vast parts of Africa still lack access to something as basic as electricity. Over 600 million people across the continent remain without power.
Source: Alexandro Blasi
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