🫒The Bulletin #65: The TLDR on DeepSeek, VC's 2025 Outlook, and an Opportunity From Left Field
In this week's bulletin- DeepSeek causes chaos across the AI industry, what the new year means for VC, and an ambassador program by Brown alumni-founded startup Left Field.🤩
Hey there! Happy New Year and welcome back to the VWV Bulletin. We are excited to kick off a new semester and unpack all of the VC news in 2025.⛵
💡For this semester, keep up with our content if you’re interested in:
Demystifying & breaking into VC
Finding opportunities in the start-up world
Keeping up with VC investment news at Brown & beyond (pro tip: this is essential to breaking in and finding opportunities)
Enjoy the Bulletin!🚀
🧠The TLDR on DeepSeek
DeepSeek, a Chinese AI startup, took the tech world by storm this week with claims of training its model for under $6 million — 20 to 50 times cheaper than its competitors. As you can imagine, it’s stirring up major disruption in both the AI and tech investment landscapes.🌋
What is DeepSeek?🤖
DeepSeek is a Chinese AI startup founded in 2023. Their quick rise to fame allowed their free AI-powered chatbot to dethrone OpenAI’s ChatGPT on the Apple app store last Monday.📈 (This is decently difficult to do, given OpenAI’s dominance in this space). There has been a huge buzz in the media about DeepSeek and its supposed competitive advantages – its high quality at a fraction of the cost of major competitors. DeepSeek is claiming they trained their most recent model, DeepSeek-V3 with less than $6M. If this is true, this makes DeepSeek 20 to 50 times cheaper than OpenAi’s o1 model. As a result, DeepSeek is also more energy efficient than its competitors.⚡This could be huge for the AI industry as concerns over AI’s energy intensity have sparked a lot of conversation over the future of AI infrastructure development. This all makes one wonder… is OpenAI out of a job?🪦
How does it impact Big Tech?📲
The whirlwind around DeepSeek caused many tech stocks to tank this past week. Most severely, Nvidia dropped more than 15% at certain points of trading. If DeepSeek is able to use fewer chips in their products, this creates a problem for companies whose revenue depends on the computationally intensive nature of training AI models. In addition, DeepSeek’s model calls into question the strategies taken by foundational model startups. These companies have raised billions at high valuations and may have to rethink their approach to AI deployment.💰 The emergence of DeepSeek comes right after the White House’s announcement of the AI Stargate Project which plans to allocate anywhere from $100 to $500B to AI infrastructure. If models like DeepSeek can be developed at a fraction of the cost, nationwide plans like this one will need to be reevaluated.🌎
How does it impact VCs?💸
Given that ⅓ of VC funding in 2024 went to AI-related fields, VCs have a lot of skin in the AI game.🎲 The total funding, surpassing 100B in investment, was allocated on the assumption that AI startups need hundreds of millions of dollars to develop their models. DeepSeek is calling this into question. If DeepSeek manages to pop the AI bubble, it could lead to an extinction-level event for VC firms that went all-in on AI this past year.🦖 Despite this danger, the general consensus is that DeepSeek will positively impact the AI industry, although there may be some collateral damage.
What else do we need to know?🤔
Finally, despite there being a positive outlook on what DeepSeek means for the future of AI, many questions are still left unanswered. It has not yet been confirmed whether DeepSeek truly spent as little as they claim on training their model. Further, there is an investigation into whether they utilized undisclosed H100 chips, which would violate U.S. export controls.❌ Whether DeepSeek is the real deal or just the start of an AI arms race, its sudden rise is forcing all stakeholders to rethink what’s possible, and what’s next, in artificial intelligence.😼
2025’s VC Outlook
As we kick off 2025, venture capitalists are facing a landscape that’s anything but predictable. Despite this, most feel that 2025 will be a year of recovery and momentum. Investors are expected to deploy more capital than in recent years with improving market conditions (fingers crossed!)🤞
According to PitchBook, U.S. VC fundraising is projected to exceed 2024’s $71 billion, with a base case of $90 billion and an upside of $110 billion. This influx of capital will help alleviate the funding crunch that many startups have faced in recent years.😌
Loosened Federal Trade Commission regulations are expected to spur an increase in VC-backed acquisitions, providing much-needed liquidity to investors. As exit markets gain momentum, both IPOs and M&A activity will contribute to a renewed cycle of VC reinvestment. The excess capital will also make investors more comfortable making deals in 2025, likely along similar themes as in 2024.🌟 However as previously mentioned, AI could have a major wake-up call in the works. In general, Trump’s reelection brings potential market volatility that could provide a shakeup across many sectors. For example, the Trump Administration's stance on crypto could make for a good year in that space.👽 On the flip side, many are concerned about how Trump’s tariffs and geopolitical views will impact the global economy.
Overall, 2025 is shaping up to be a rebound year for venture capital, with increased fundraising, a healthier IPO market, and more exit opportunities. (At VVW are hoping some of this good juju comes our way…)🔮
💋Paid Opportunity From Left Field
Left Field (formerly MeetCute) is looking for campus ambassadors on Brown’s campus! Founded by Brown grads Kate Sieler and Samantha Martin, Left Field is a new dating app that’s all about recreating the spontaneity and excitement of real-life connections.✨ Instead of swiping, users receive unprompted match suggestions based on timing and location, and can see the profiles of other people in their neighborhood, keeping the process organic and meaningful.
The Left Field Campus Ambassador Program is designed to empower socially engaged students to creatively and authentically promote the Left Field platform on their campuses.🥳 Ambassadors will receive resources and incentives to host events, drive downloads/signups, and build a community around the Left Field brand.
If you are interested, please reach out to to sam@left-field.co!🕺
💻 We’re Updating Our Website
We love our website, and want to make sure it is accurate and up-to-date. Please let us know through this form if you are a part of the VWV team (Investment Committee, Advisors, Alumni) and have changes you wish to make to your personal profile.
That’s it for this week, feel free to email me abigail_gonzalez@brown.edu with any inquiries! 💌
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