Here is why ftse investment trusts holding nvidia and ai stocks broke today

Many FTSE investment trusts were quoting very less today (January 27). In the blue chip index, Scottish mortgage investment trust 5.5%fell, while a large number of Ftse 250 The funds also collapsed.

The common theme is that these are technology -centered trusts. They have different degrees of exposure to Nvidia (Nasdaq: NVDA) and Related artificial intelligence (ai), which all decrease significantly in the previous market in New York.

While I write, the price of Nvidia shares will open 12% lower.

What the hell is happening?

Basically, a new previously dark Chinese company called Depseek has put the cat among the giants Nasdaq Palomas, Tigle which looks like a lot of technology.

Deepseek is a Chinese Large Language Model developer (LLM), similar to Openai Chatgpt. He launched his R1 ai model on January 20. However, he claims to have built this model much cheaper, using the less powerful H800 chips in NVIDIA, unlike the upper H100 version of the technological giant.

There are export restrictions on NVIDIA H100 chips sold in China, which means that shortage could have caused truly disruptive innovation.

The growth of NVIDIA profits is based on a massive expense of continuous capital in ai infrastructure. MicrosoftFor example, he plans to spend a colossal $ 80 billion in ai in 2025. But apparently Depseek trained his latest best performance model in two months for $ 5.6 million, a fraction of the range of $ 100 million of $ 1 cited by anthropic rival last year .

The Chinese application is currently at the top of AppleApplication store rankings. The veteran capitalist of risk, Marc Andreessen said that this is potentially “One of the most surprising and impressive advances I have seen“

Doubts

If it is not necessary hundreds of billions of dollars of investment in high -end chips and an extensive computer power, then the potential risk for the growth of NVIDIA seems obvious. But my suspicion is that there is more than it seems here. There are already doubts about the true cost of training this LLM.

More specifically, surely Executives and ai engineers in some of the best technological companies on Earth have not been completely blind due to the exact costs necessary to train these models. Have they?

Potential purchase opportunities ahead

So, could there be purchase opportunities? Potentially, yes, as it seems that the market is sold first and ask questions later.

When there is a generalized sale like this, it can mean that high quality shares end up. The baby is thrown with bath water, so to speak.

Allianz technology Trust and Polar Capital technology Trust could be worth considering whether the sale worsens. Each has diversified exposure to many unstoppable technological trends, including cloud computing, electronic commerce, semiconductors and cybersecurity.

Meanwhile, the Scottish mortgage seems to have been ahead of the curve, which has significantly reduced its possession of Nvidia in recent months. In November, manager Tom Slater said: “Companies must find ways to offer ai systems at competitive prices while administering out -of -training costs. This raises concerns about the sustainability of the current spending of capital equipment, including Nvidia chips. “

Perhaps this interruption is what is needed to really become the mainstream.

We have Microsoft, Platform goaland Tesla Informing profits this week. It will be fascinating to hear what management says about it if asked, particularly the reduction of Violet Elon Musk.