China's AI Model Kimi K3 Repeats DeepSeek Panic? US Semiconductor Stocks Plunge — Ruan Mu-Hua's Conclusion: Don't Overthink It

Chinese startup Moonshot AI unveiled its latest artificial intelligence model, Kimi K3, in the early hours of the 17th, claiming it can complete chip design in just 48 hours at only 60% of the cost of top US models. The astonishing cost-performance ratio shocked the market, prompting skepticism toward tech giants' massive investments in AI infrastructure and intensifying the competition for AI dominance between the US and China.

In response, financial expert Ruan Mu-Hua posted on Facebook, concluding that the idea that Kimi K3 will collapse AI computing capital expenditure is 'overthinking.' He stated that while Kimi K3 is a replica of DeepSeek, it certainly won't collapse AI computing capex. 'It's overthinking, but indeed, open-source models from the mainland are very strong, and there's no need to deny that,' he said. He believes that generative AI large language models, whether open-source or not, ultimately depend on computing cost and performance—just like any other business competition.

Ruan emphasized that competition is beneficial—good for long-term business model development and for users. As AI model competition intensifies, leading players need greater capital expenditure and stronger computing power to stimulate demand. 'Demand always comes from need. Without need, even the cheapest product has no meaning,' he stated.

He further stressed that computing cost is undoubtedly driven by demand. Whether companies pursue cost reduction and efficiency or raise computing prices to offset capital expenditure ultimately depends on demand. The computing market will enter a survival-of-the-fittest phase, and uncompetitive players will inevitably be eliminated. Stock prices in capital markets depend on the intrinsic value of the asset—individual stock fluctuations won't change the overall trend.

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