The post SoftBank feels the DeepSeek effect as low-cost AI fuels investor pessimism around $500B Stargate project appeared on BitcoinEthereumNews.com.

SoftBank is actively pursuing a $500 billion investment for its Stargate project, the initiative it introduced as a collaboration between SoftBank and OpenAI to support the development of AI infrastructure in the US.  However, the $5.58 million DeepSeek-V3 AI model released by a Chinese group has raised investor skepticism about the feasibility of the $500 billion earmarked for the Stargate initiative. DeepSeek’s launch raises questions about Stargate’s logic Since it arrived on the scene, DeepSeek has advertised affordable AI technologies that many investors and AI companies in the US perceive as threats to high-cost AI initiatives like the Stargate project. It has also raised doubts about the initiative’s competitive edge when it eventually takes off. There is also the fact that experts like Fibonacci Asset’s Yun believe that monetizing large-scale AI projects like Stargate could take years, which complicates things for investors. While market sentiments among SoftBank investors remain pessimistic due to the emergence of more low-cost alternatives from China, there is still hope.  SoftBank may need to go back to the drawing board to reassess its approach to the Stargate project and address investor concerns with a plan that aligns with the current reality of the AI market. SoftBank has yet to determine funding sources Masayoshi Son, founder of SoftBank, is the architect of the Stargate initiative, which has been pitched as a way to secure America’s leading position in the AI sector. Son is a Japan-based billionaire who already committed in December to invest $100 billion in US projects over the next four years.  He previously vowed to contribute $50 billion in new investments ahead of Trump’s first term, which included a large stake in the troubled office-sharing company, WeWork. The Stargate project was announced on January 21, 2025, but since then, Son’s SoftBank has struggled to secure…

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Filed under: News - @ February 14, 2025 10:20 am