Increased competition in the field of artificial intelligence with the emergence of China’s DeepSeek is a positive development that will help tech companies cut costs and improve platforms, according to Cathie Wood, Chief Executive Officer at Ark Investment Management.
DeepSeek’s new open-source AI model, widely seen as a challenge to U.S. Dominance in the tech industry, caused a 3% rout in the tech-heavy Nasdaq 100 Index on Monday, marking its worst session since December. Wood said that now isn’t the time to regulate tech more heavily as DeepSeek fuels competition on AI costs.
“Lowering costs is great for the world,” Wood said in an interview with Bloomberg TV. “They were collapsing anyway, DeepSeek has stepped it up a notch.
Wood has gained fame — and scorn — for her long-shot bets on the nascent technologies that have fed repeated boom-and-bust cycles in her most famous vehicle, the $6.5 billion Ark Innovation ETF (ticker ARKK). Last year, the flagship fund gained 8% — a little more than a third of the S&P 500’s rally. This year, however, ARKK has surged nearly 10%, outpacing the benchmark index’s 2.2% gain.
ARKK owns hyperscalers including Meta Platforms Inc and Amazon.com Inc, which Wood thinks could benefit from declining costs and may use some of the techniques and algorithms from DeepSeek to improve their platforms.
A lighter touch on AI regulation from U.S. President Donald Trump would further spur innovation and boost the tech industry, she said.
In the U.S., regulation had “started to intrude in a technology that is today where the internet was in the early 1990s,” she said. “Now is not the time to regulate it heavily.”
Wood said that Chinese leader Xi Jinping’s push for “new productive forces” appears to be working and that Ark was “looking more closely at China now.”