ASML CEO argues that DeepSeek is Beneficial for Chip Demand

ASML's CEO argued that the introduction of efficient AI models, like China's DeepSeek, is ultimately beneficial for the chip market.

Christophe Fouquet stated that perceptions of AI spending are distorted by the enormous investments made by "hyperscalers" – companies like Google, Meta, and Microsoft which are pouring billions of dollars into building data centers filled with advanced chips.

Christophe Fouquet, speaking after ASML reported strong earnings driven by high AI demand, remarked, "If you look at the number of chips involved, it's actually quite small."

He was responding to questions from journalists about the impact of DeepSeek's AI product launch, which caused tech stock prices to drop by billions earlier this week.

“We believe that when it comes to the size of our business, the demand will come more from the use of AI” than training large AI models, he said.

He pointed out the uses for AI in applications that need chips ranging from phones to cars to robotics and industrial applications.

“If you want to have an AI chip on your phone, the cost of those chips will be a fraction of what maybe the hyperscaler can pay for it “.

“If the cost doesn’t go down, you may continue to sell a few very expensive chips and make a few people very happy, but you will not basically bring this technology to the masses and the volume will remain small.”

“I don’t know exactly what Deepseek can or cannot do, but I say again, anything that will drive costs down is good news for ASML in the long term,” Fouquet said.

Analyst Sara Russo of Bernstein said she agreed with the CEO’s opinion, but she also spotlighted that DeepSeek’s impact is only just beginning to be felt and ASML is a supply chain company.

“They will need to see how the AI models and applications develop, how that drives chip workloads, how that changes chip demand, and how that changes chip manufacturer demand,” she said.