DeepSeek Could Be Extinction-Level Event for Venture Capital Firms Investing in AI Models, According to Axios on January 27, 2025

DeepSeek, a new development in the AI sector, is being described as a potential extinction-level event for venture capital firms that heavily invested in foundational model companies. Analysts suggest that the implications of DeepSeek could vary significantly depending on the type of venture capital firm involved. Many of the largest firms have invested in closed-source model providers as a hedge against the possibility that these models might become the primary source of value in artificial intelligence. While some investors express concern over the potential fallout, others indicate that they are not panicking, viewing the situation with a degree of caution.