The current launch of DeepSeek’s R1 mannequin has despatched shockwaves by means of the generative AI panorama, with main expertise shares experiencing declines in response to the mannequin’s potential influence.
IoT Analytics’ newest analysis offers an in depth evaluation of the winners and losers within the evolving AI worth chain.
Key highlights:
The current launch of DeepSeek’s R1 mannequin has shaken tech shares, with shares of some market members (e.g., NVIDIA) down ~20% since January 27, 2025.
R1 is essentially open, on par with main proprietary fashions, seems to have been educated at considerably decrease price, and is cheaper to make use of when it comes to API entry, all of which level to an innovation that will change aggressive dynamics within the area of Generative AI.
IoT Analytics sees finish customers and AI purposes suppliers as the most important winners of those current developments, whereas proprietary mannequin suppliers stand to lose essentially the most, primarily based on worth chain evaluation from the Generative AI Market Report 2025–2030.
Choose analyst quotes:
Knud Lasse Lueth, CEO at IoT Analytics, feedback that “DeepSeek R1 is a significant development in the generative AI landscape, reinforcing the shift toward more open, cost-efficient models. With the generative AI market projected to grow at a 52% CAGR through 2030, this innovation accelerates competition and forces proprietary model providers to rethink their value propositions. While NVIDIA still dominates the AI chip market with a 92% share, the emergence of models like R1—trained with fewer high-end GPUs—raises questions about the long-term demand for expensive AI hardware. The biggest beneficiaries of this trend are AI adopters and application providers, who now have access to more affordable and flexible AI options.”
Philipp Wegner, Principal Analyst at IoT Analytics, provides that
“DeepSeek R1 showed again that proprietary foundation model providers like OpenAI and Anthropic have little moat. Competition will only get more fierce from here.”
Winners and losers within the generative AI worth chain
IoT Analytics’ analysis assesses the long-term market influence of DeepSeek R1 and the broader shift towards cost-efficient, open AI fashions.
Clear winners:
Finish customers: Decrease-cost AI will cut back bills for companies and shoppers whereas growing accessibility.
GenAI utility suppliers: Firms constructing AI-powered purposes will profit from elevated mannequin availability and decrease API prices.
Possible winners:
Edge AI/computing firms: Extra environment friendly AI fashions drive demand for native inference on edge units.
Knowledge administration suppliers: AI adoption requires improved knowledge dealing with, benefiting platforms like MongoDB and Snowflake.
GenAI providers suppliers: Enterprises require knowledgeable steerage to combine and optimize AI options, driving demand for providers.
Impartial influence:
Cloud computing suppliers: Whereas cloud platforms stay central for AI growth, elevated effectivity could cut back infrastructure funding wants.
EDA software program suppliers: AI specialization might drive demand for brand new chip designs however cut back reliance on conventional high-performance GPUs.
Possible losers:
AI chip firms: If new AI fashions require fewer GPUs for coaching and inference, main chipmakers like NVIDIA might face slower demand progress.
Knowledge heart infrastructure: Lowered want for high-end AI chips might restrict growth in networking, cooling, and energy provide sectors.
Clear losers:
Proprietary mannequin suppliers: Firms counting on closed, high-cost AI fashions, reminiscent of OpenAI and Anthropic, face growing strain as free and customizable options emerge.
