Salesforce Stock Rises 10% Due to DeepSeek and Cheaper AI : Tom M

Salesforce Stock Rises 10% Due to DeepSeek and Cheaper AI
by: Tom M
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**Summary of Key Details:** 1. **Salesforce Stock Increase:** Salesforce (CRM) stock rose by 10% from $330.06 on January 22 to $365.57 by January 28, defying a trend where many Western tech companies experienced declines. 2. **Impact of DeepSeek:** The surge in Salesforce's stock coincided with the launch of a Chinese AI app called DeepSeek, which has overtaken ChatGPT in popularity on the Apple Store. Its release has impacted other tech companies negatively, with Nvidia experiencing an 18.3% drop in stock, losing nearly $600B in market value. 3. **Market Commentary:** Venture capitalist Marc Andreessen described DeepSeek's launch as a "Sputnik moment" for AI, indicating its potential to reshape the landscape. 4. **Cost-Effectiveness:** The DeepSeek app, developed for only $6M using the open-source DeepSeek-V3 model, offers competition to more expensive AI models from Silicon Valley. This cost advantage may allow Salesforce and similar companies to utilize cheaper AI models effectively. 5. **Market Reactions:** Major tech companies, including Oracle, Microsoft, and Meta, saw their stocks decline sharply after DeepSeek's launch, highlighting competitive pressures. 6. **Strategic Positioning:** Salesforce’s CEO, Marc Benioff, commented on the shift in AI value from models and user interfaces to the importance of data and metadata, suggesting a transformation in how AI's potential is realized. 7. **Future Outlook:** With Microsoft and Meta scheduled to announce their financial results, observers are eager to see how DeepSeek's emergence has affected their positions in the market. **Additional Context:** The rise of AI technology from China poses challenges for U.S. tech dominance, especially since Chinese companies have started to produce competitive AI models with less investment in infrastructure. The U.S. government had previously restricted the sale of advanced chips to China; however, swift advancements from Chinese firms highlight a shift in the tech landscape. **Relevant Hashtags for SEO:** #Salesforce #CRM #DeepSeek #AI #TechStock #Nvidia #SiliconValley #Meta #Microsoft #ChatGPT #InvestmentTrends #ChineseAI #AIModels #MarcBenioff #TechMarket


Salesforce stock has risen 10% in a week – despite other Western tech sector giants taking a massive hit amid the release of DeepSeek. 

CRM stock was at $330.06 on the morning of Wednesday, January 22, rising to $365.57 USD on Tuesday, January 28 – at a time when other Silicon Valley companies are reeling amid the launch of the Chinese AI app, which has overtaken ChatGPT as the top Apple Store app. 

Tech Sector Shaken

AI chip designer Nvidia appears to be very much on the other side of the spectrum, suffering a brutal 18.3% drop since January 22. The company’s shares took the brunt of the plunge on Monday, resulting in a market cap loss of close to $600B, making it the biggest drop ever for a US company.

Venture capitalist Marc Andreessen said that the launch of DeepSeek-R1 was a “Sputnik moment” for the field of AI.

The Chinese AI app is powered by the open-source DeepSeek-V3 model, which was reportedly developed for just $6M; a fraction of the cost of Silicon Valley competitors. 

Both Salesforce and ServiceNow saw increases after Barclays said both companies “should benefit from cheaper AI models”.

Salesforce lets clients access AI models from third-party technology partners like OpenAI, Anthropic, Google, and Amazon.

This might mean that Salesforce’s AI technology will be cheaper to run in the face of a cheaper LLM becoming available.

The cloud giant’s CEO Marc Benioff took to X on January 27 – amid the major stock shakeup – to voice his opinion on why it was happening.

Oracle, Microsoft, and Meta shares were also down on Monday morning amid the sudden appearance of DeepSeek. 

Final Thoughts

Chinese AI appears to be threatening the US’ desire for dominance in the AI industry.

Claims that it was developed for a fraction of the cost of rivals like OpenAI’s ChatGPT might best be taken with a pinch of salt at the moment, but if they prove to be correct, it would be a significant blow for Western tech. 

The United States government had bolstered restrictions on selling American-made advanced chips to China in 2021, but Chinese AI firms started sharing their work more readily, resulting in apparently significant leaps with models running on much less computing power.

The financial results of Microsoft and Meta are expected on Wednesday. Apple’s are expected on Thursday. 

The post Salesforce Stock Rises 10% Due to DeepSeek and Cheaper AI appeared first on Salesforce Ben.


January 28, 2025 at 10:21PM
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