An illustration displaying the Deepseek app icon / Reuters-Yonhap
Naver and Kakao are seeing sudden advantages from the rise of Chinese language synthetic intelligence (AI) startup DeepSeek as its low-cost, open-source growth has raised expectations that Korean latecomers may catch up within the extremely aggressive AI market, analysts mentioned Monday.
„The DeepSeek incident has shifted the narrative from the dominance of AI {hardware} corporations to improved profitability for software program corporations because of declining AI prices,“ Kiwoom Securities analyst Han Ji-young mentioned.
DeepSeek’s newest AI inference mannequin, R1, just lately made a shock market debut by delivering a notable efficiency regardless of its low coaching prices and use of lower-grade chips. Whereas many points stay to be verified, the success of the mannequin and the truth that it is open-source are evaluated to create alternatives for latecomers like Naver and Kakao.
Such expectations have already been mirrored of their inventory costs. On Friday, Korea’s first buying and selling day since DeepSeek’s announcement and the Lunar New Yr vacation, Naver and Kakao’s inventory costs jumped 6.13 % and seven.27 %, respectively.
The rally continued on Monday, with Kakao reaching 41,800 received ($28.5), rising by 9 %. Naver elevated barely by 0.23 % and ended at 217,000 received, managing to carry up regardless of U.S. President Donald Trump’s tariff measures having chilled the general home inventory market.
Their features stand in stark distinction to the struggles of home semiconductor giants. Since Jan. 31, the inventory costs of Samsung Electronics and SK hynix have declined by 5.03 % and 13.62 %, respectively, amid considerations that demand for high-cost chips from Nvidia may weaken. Each corporations are main chip suppliers to the U.S. AI chipmaker.
„The rising power of open-source expertise may assist bridge the hole with massive tech,“ Sangsangin Funding & Securities analyst Choi Seung-ho mentioned. „If DeepSeek’s low-cost methodology is successfully adopted, it may revitalize AI growth in Korea, which has been struggling because of inadequate infrastructure funding.“
Naver and Kakao have already made developments in AI, even growing massive language fashions able to processing human languages. Nonetheless, their efficiency has lagged behind international leaders, going through challenges in making the large-scale investments required to undertake high-performance computing assets.
Analysts say that Naver and Kakao may see a rebound, utilizing DeepSeek’s market shakeup as a catalyst. Each shares have lengthy been burdened by sluggish efficiency.
Korea Funding & Securities has raised its goal value for Naver by 8.3 %, from 240,000 received to 260,000 received, and for Kakao by 8.9 %, from 46,000 received to 49,000 received.
„The emergence of DeepSeek marks a brand new turning level within the AI business, signaling the potential for both getting into a brand new development part or accelerating the transition to maturity,“ Daishin Securities analyst Lee Kyoung-min mentioned. „Because the business matures, long-term development prospects strengthen, with demand anticipated to rise alongside the increasing adoption of AI.“
