ASML CEO sees low-cost AI models like DeepSeek driving more demand — not less
Dutch semiconductor equipment maker ASML expects new low-cost models like the one rolled out by China's DeepSeek to lead to more — rather than less — demand for AI chips, CEO Christophe Fouquet told CNBC Wednesday.
ASML beat estimates on both sales and profit for the fourth quarter and said it had an order backlog of roughly 36 billion euros ($37.4 billion) at the end of 2024. The news prompted a jump in the firm's shares as investor fears that DeepSeek's model could cool semiconductor spending ebbed.
Without addressing the specifics of DeepSeek's newly revealed R1 model — which took the tech world by storm with performance benchmarks rivalling leading U.S. players at a fraction of the cost — Fouquet said that he sees no sign of a slowdown in demand for AI-focused chips.
"A lower cost of AI could mean more applications. More applications means more demand over time. We see that as an opportunity for more chips demand," Fouquet said in an interview with CNBC's Arjun Kharpal.
"For the hyperscaler, the capex [capital expenditure] is today spent for investment," he said. "They are investing heavily in R&D [research and development]. They continue to want to do that."
Hyperscalers refers to cloud computing giants such as Microsoft, Amazon and Google which are investing heavily in the data center infrastructure that power AI models.
Last week, DeepSeek released R1, an open-source reasoning model that claims to beat OpenAI's o1 model on both cost and performance. Open-source software source code is made freely available on the open web for possible modification and redistribution.
Growing awareness of DeepSeek's new model caused a severe slump in technology stocks this week, amid concerns of a possible retrenchment in spending on the