Dutch semiconductor tools maker ASML expects new low-cost fashions just like the one rolled out by China’s DeepSeek to result in extra — fairly than much less — demand for AI chips, CEO Christophe Fouquet advised CNBC Wednesday.
ASML beat estimates on each gross sales and revenue for the fourth quarter and mentioned it had an order backlog of roughly 36 billion euros ($37.4 billion) on the finish of 2024. The information prompted a leap within the agency’s shares as investor fears that DeepSeek’s mannequin may cool semiconductor spending ebbed.
With out addressing the specifics of DeepSeek’s newly revealed R1 mannequin — which took the tech world by storm with efficiency benchmarks rivalling main U.S. gamers at a fraction of the associated fee — Fouquet mentioned that he sees no signal of a slowdown in demand for AI-focused chips.
“A decrease price of AI may imply extra functions. Extra functions means extra demand over time. We see that as a chance for extra chips demand,” Fouquet mentioned in an interview with CNBC’s Arjun Kharpal.
“For the hyperscaler, the capex [capital expenditure] is right now spent for funding,” he mentioned. “They’re investing closely in R&D [research and development]. They proceed to wish to do this.”
Hyperscalers refers to cloud computing giants akin to Microsoft, Amazon and Google that are investing closely within the information heart infrastructure that energy AI fashions.
Final week, DeepSeek launched R1, an open-source reasoning mannequin that claims to beat OpenAI’s o1 mannequin on each price and efficiency. Open-source software program supply code is made freely obtainable on the open internet for attainable modification and redistribution.
DeepSeek drama
Rising consciousness of DeepSeek’s new mannequin brought about a extreme droop in know-how shares this week, amid issues of a attainable retrenchment in spending on the highly effective graphics processing items required to coach and run AI workloads.
Nvidia misplaced near $600 billion in market capitalization on Monday — the largest single-day drop for any firm in U.S. historical past — whereas ASML and different semiconductor shares additionally notched heavy losses.
Shares of each Nvidia and ASML have since recovered some floor later within the week.
Fouquet appeared unfazed by DeepSeek’s implications for each AI hyperscalers and chipmakers throughout the Wednesday interview. Whereas acknowledging there’s “a variety of dialogue” surrounding DeepSeek, the ASML CEO mentioned his firm hasn’t heard from prospects asking in regards to the influence the Chinese language agency’s mannequin can have on chip demand.
“For AI to actually come to life within the subsequent few years — not solely with the hyperscalers, however with all of us in our cellphone, PC — we’d like AI to handle two issues: price and power consumption,” he advised CNBC.
“We imagine that something that can go within the course of decreasing price on AI is, in actual fact, in all probability information as a result of it will enable functions to go to many, many extra units,” Fouquet added.
The DeepSeek reveal triggered questions over eyewatering spending from main AI gamers akin to OpenAI and Microsoft on Nvidia graphics processing items, that are wanted to coach and run probably the most superior AI fashions.
This might in flip hit demand for ASML’s high-precision excessive ultraviolet (EUV) machines, that are used to print probably the most superior microchips. EUV instruments accounted for 3 billion euros out of the 7.1 billion euros ASML reported in fourth-quarter web bookings.