Palmer Luckey Critiques Hysteria Surrounding DeepSeek

Palmer Luckey, the founder of Oculus and Anduril Industries, has recently expressed his strong disapproval regarding the widespread panic triggered by the AI startup DeepSeek. He has characterized the reaction as a significant overreaction.

What Happened: On a recent Tuesday, Luckey took to X, formerly known as Twitter, to voice his concerns. He referred to the intense anxiety surrounding DeepSeek, which is based in China, as an "indictment of so many."">

In his commentary, Luckey labeled the $5 million figure associated with DeepSeek as incorrect. He argues that there is a hidden agenda by a Chinese hedge fund aimed at dissuading investment in American AI startups, thereby capitalizing on short positions against U.S. tech giants such as Nvidia Corp. (NVDA).

DeepSeek has notable backing from High-Flyer, a Chinese quantitative hedge fund valued at $8 billion and co-founded by Liang Wenfeng.

Luckey attributed deeper motivations behind the hedge fund's actions, suggesting that they might be trying to obscure potential sanction violations. He remarked, "America is a fertile bed for psyops like this because our media apparatus hates our technology companies and wants to see President Trump fail." This sentiment reflects his view that the media and certain enterprises are conspiring against American innovations.

He further emphasized that while DeepSeek is a noteworthy development in the tech realm, the intense reaction is indicative of broader issues.

Why It Matters: In response to the circumstances surrounding DeepSeek, the startup asserted that it developed its low-cost R1 model in a mere two months with investments totaling $5.6 million. This achievement has led many to question the rationale behind significant investments by several U.S. tech companies in developing AI technologies.

On the preceding Monday, shares of Nvidia took a severe hit, plummeting by 17%, which resulted in a staggering $600 billion reduction in its market value—marking the largest drop for the company in a single day. Concurrently, the Nasdaq 100 index saw more than a 3% decline, experiencing one of its sharpest drops since December of the previous year.

Furthermore, billionaire investor Bill Ackman raised concerns regarding whether the hedge fund associated with DeepSeek could have gained from falls in tech stock prices witnessed that day. He pointed out that it created a significant opportunity for profit.

In light of the developments, the White House has commenced a review of DeepSeek's potential implications for national security.

In other related news, Perplexity AI, a company backed by Jeff Bezos, has introduced a self-hosted version of the DeepSeek R1 model, marking another step in the AI development landscape.

Palmer, Luckey, DeepSeek