The US supremacy in artificial intelligence is at risk more than ever. That’s the harsh reality in the aftermath of Chinese intelligence startup DeepSeek unveiling low-cost AI models. Concerns that China is slowly beating the US come as a surprise, given that the two nations have been entangled in a fierce battle in the AI race.
The US has been the most aggressive in derailing China’s AI ambitions. Washington has already passed and implemented stringent regulations prohibiting US companies from trading, let alone selling advanced chips and equipment that would accelerate China’s AI development.
“[DeepSeek’s] algorithmic innovations remind us that China and the US are neck and neck and that our technological edge isn’t guaranteed, pushing our industry to make AI more efficient,” says Eric Schmidt, the former chief executive and chair of Google. “To get to AGI first, we’ll need to continue to invest in talent, support our vibrant open-source ecosystem, and ensure we out-innovate, not just outspend, our competitors.”
The innovation from DeepSeek has two ramifications for the technology sector. First of all, like ChatGPT in 2022, it is likely to hasten AI’s commercial development and adoption. By appearing to demonstrate that creating sophisticated AI models does not necessitate enormous amounts of infrastructure and, consequently, capital, it also poses a threat to shatter the investment tenets that have supported the US stock market as a whole.
Even as China and the US battle it out in the artificial arms race, other superpowers are also putting their house in order as they look to tap the massive opportunities around AI. India is one country that has also set sights on revolutionary technology that has the potential to impact various industries, from healthcare to defense, cybersecurity and the auto industry.
India has already engaged OpenAI, which looks to be at the forefront of creating a full AI stack.
“Had a super cool discussion with @same on our strategy of creating the entire AI stack – GPUs, model, and apps. Willing to collaborate with India on all three,” Union Electronics and IT Minister Ashwini Vaishnaw posted on X.
India’s Finance Minister Nirmala Sitharaman has already approved the establishment of three Centers of Excellence (Coe’s) in AI for education. With a Rs. 500 crore budget, the project intends to advance AI research and its application in the nation’s educational system. As India seeks to increase its competitiveness in the field of artificial intelligence, the new AI Centers of Excellence will focus on cutting-edge research and the creation of AI learning resources.
Within six months, the nation is also anticipated to introduce its own reasonably priced, safe, and indigenous AI model. The India AI mission is now closer to adapting native AI solutions for the domestic context using Indian languages, supported by a state-of-the-art shared computing facility.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a digital circuit board with chips illuminated by LED lights.
10. BlackSky Technology Inc. (NYSE:BKSY)
Number of Hedge Fund Holders: 7
BlackSky Technology Inc. (NYSE:BKSY) is a technology company that provides geospatial intelligence, imagery and related data analytic products and services. On February 5th, the company confirmed signing a multi-year contract with geospatial intelligence fusion specialist Emerging Dynamics. The agreement paves the way for the company to provide satellite imagery services for defense clients worldwide.
BlackSky Technology Inc. (NYSE:BKSY) achieves near-hourly satellite revisit rates by combining extensive AI-driven automation with deliberate constellation design. Its BlackSky Spectra tasking and analytics platform delivers time-sensitive imagery and analytical output. The combined services of BlackSky and EMDYN will combine terrestrial and space data for on-demand insights at scale. Thanks to the special AI-driven services, the entire tasking-to-dissemination process will experience a reduction in end-to-end latency.
9. Lumen Technologies, Inc. (NYSE:LUMN)
Number of Hedge Fund Holders: 26
Lumen Technologies, Inc. (NYSE:LUMN) is a telecom services company that offers telecommunications networks and cloud services. The company delivered better-than-expected fourth-quarter results on February 5, driven by strong demand for data centres amid the AI boom. It logged $3.33 billion in revenues against $3.2 billion expected, with earnings per share of 9 cents versus 5 cents expected.
The better-than-expected results come on Lumen emerging as one of the biggest beneficiaries amid increased investments in data centres needed to support AI applications. Lumen Technologies, Inc. (NYSE:LUMN) has already inked deals worth over $8 billion with cloud giants, including Google, Microsoft, Amazon Web Services and Meta Platforms for its networking solutions.
