Investors apparently don’t know who to trust.

In one corner, we have DeepSeek, a Chinese AI upstart that has unveiled an AI assistant capable of operating at a fraction of the cost of its competitors.

DeepSeek claims its models are 20 to 50 times cheaper to train and run than those from OpenAI, challenging the assumption that cutting-edge AI requires massive spending on Nvidia’s most advanced chips.

This breakthrough has sent shockwaves through the AI industry, causing Monday’s massive selloff in AI stocks as investors reassessed the future of AI infrastructure spending.

In the other corner, we have America’s tech heavyweights – Sam Altman, Gary Tan, Pat Gelsinger, and Elon Musk – who are doubling down on their belief in high-powered AI infrastructure and the need for more compute than ever before.

So, if you had to pick a side, who are you trusting?

Fighter #1: DeepSeek: The Challenger from China

DeepSeek has stormed onto the scene, claiming it can develop AI models on par with OpenAI and other U.S. tech giants – without the need for advanced Nvidia chips.

But questions remain about the company’s transparency and data practices:

• CCP Ties: DeepSeek’s connections to the Chinese government raise concerns about data security, censorship, and state influence over its AI models.

• Shady Chip Claims: Despite U.S. export restrictions, reports suggest DeepSeek may have more access to Nvidia chips than it admits (possibly up to 50,000), raising questions about its credibility.

• Data Collection Risks: DeepSeek’s apps require invasive permissions, including access to users’ email accounts. Its #1 ranking on the U.S. Apple App Store signals rapid adoption, but at what cost?

Fighter #2: U.S. Tech Leaders: Betting on More Compute

While DeepSeek shakes up the AI world, U.S. tech leaders are standing firm on their long-term strategies:

• Pat Gelsinger (Intel’s Former CEO): Dismisses DeepSeek’s impact, calling the market reaction overblown in a LinkedIn post. In the post he states: “The market reaction is wrong, lowering the cost of AI will expand the market. Today I’m an Nvidia and AI stock buyer and happy to benefit from lower prices.”

• Gary Tan (Y Combinator CEO): Sees the DeepSeek-induced dip in AI stocks as a buying opportunity – he loaded up on Nvidia shares during Monday’s selloff according to a post on X.

• Sam Altman (OpenAI CEO): Continues to emphasize the importance of vast computing power. OpenAI is pushing forward with even more ambitious AI models, betting that the future will demand exponential increases in compute capacity.

• Elon Musk (Tech Founder/Billionaire): Has expressed skepticism about DeepSeek’s claims, questioning whether the company truly trained its AI with only 2,000 Nvidia chips. He has also pointed to reports that DeepSeek may have significantly more Nvidia hardware than it admits, despite U.S. export restrictions.

Who Do You Trust?

As an investor (and quite frankly an American) I’ve been conditioned to be skeptical about any data, news, or technologies coming out of China.

For most of my investing career, fellow investors have largely followed suit… until this week when the DeepSeek news was released.

Investors took their announcement as fact and quickly sold any and all semiconductor stocks.

Now that the news is out and AI stock prices are (still) lower, we face a choice: Do we trust DeepSeek, a company with questionable transparency and government ties? Or do we believe in the U.S. tech leaders who are putting their money where their mouths are?

I believe the choice is clear.

If you don’t have any exposure to Nvidia (NVDA) shares, this selloff presents a great buying opportunity.