As DeepSeek inspires AI underdogs, Japan software stocks surge

Chip-testing equipment maker Advantest tumbles amid shift away from hardware

DeepSeek's development of generative AI without advanced chips gives hope to cash-strapped Japanese developers. © Reuters

YUKI OKOSHI

February 6, 2025 04:45 JST

TOKYO -- Chinese startup DeepSeek's feat in generative AI development is changing market dynamics here as well, with software companies like NEC replacing hardware makers as the driving force of Japan's AI stocks.

DeepSeek's announcement last month that it has developed advanced AI with less-advanced and fewer chips has emboldened developers like startup Preferred Networks, one of Japan's leading AI companies.