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30 January
Will Cheaper AI Models Like DeepSeek Become a Boon? 3 Stocks to Watch

DeepSeek, a Chinese AI company, has emerged as a formidable player in the artificial intelligence landscape, particularly with its cost-efficient large language models (LLMs).

Unlike expensive U.S. models such as OpenAI’s GPT-4 or Google’s Gemini, DeepSeek’s models are designed to be significantly cheaper to train and deploy, making advanced AI accessible to a broader range of industries. This affordability has the potential to disrupt not only the AI sector but also industries that rely on AI-driven automation, such as healthcare, energy and finance.

DeepSeek’s focus on efficiency sets it apart from its American counterparts. While models like GPT-4 require substantial resources to train and run, DeepSeek claims to achieve similar performance at a fraction of the cost. This efficiency stems from proprietary optimizations in model architecture and training processes, allowing for wider adoption, especially in regions with limited computational infrastructure.

Such advantages could lead to a fundamental shift in AI business models in the United States, where firms may need to rethink their reliance on expensive AI as a competitive advantage.

DeepSeek's Performance Vs Others

deepseek.com

Image Source: deepseek.com

Rising Controversies

However, DeepSeek has not been without controversy. Allegations have surfaced regarding its use of “distillation,” a technique where a smaller AI model is trained using outputs from a larger, more advanced model. Some critics argue that this practice, if applied to proprietary AI models developed by U.S. companies, raises ethical and legal concerns over intellectual property rights. Additionally, concerns about sensitive data exposure have also emerged, with skeptics questioning whether DeepSeek’s AI training practices adhere to strict data privacy standards, particularly when dealing with healthcare or financial data.

The Effect

The impact of DeepSeek’s rise has already been felt in the U.S. stock market that lost close to $1 trillion following the news. Companies like NVIDIA that dominate the AI chip sector, could see long-term repercussions as DeepSeek’s approach requires less computational power, potentially reducing demand for high-end GPUs.

Likewise, cloud computing providers such as Microsoft and Amazon Web Services, which have benefited from AI’s insatiable appetite for processing power, might face pricing pressures if companies opt for cheaper AI solutions. Additionally, firms specializing in AI-driven medical imaging, such as GE HealthCare and Philips, could find DeepSeek’s models an attractive alternative, intensifying competition in the AI-powered diagnostics market.

DeepSeek Rattle: A Boon for MedTech?

DeepSeek, with its focus on cost-effective AI models, has the potential to revolutionize the MedTech industry by making AI-driven diagnostics more affordable. The reduced cost of DeepSeek’s models could enable wider access to imaging analysis, pathology detection, and early disease identification, particularly in low-resource settings. This affordability allows medtech companies such as GE HealthCare GEHC to integrate AI into their devices at a lower cost, facilitating broader adoption in imaging systems, robotic-assisted surgeries and wearable health monitoring.

Furthermore, DeepSeek's AI could democratize healthcare by allowing smaller hospitals and clinics to leverage powerful diagnostic tools, improving equity in underserved regions. The lower cost of DeepSeek’s AI models could also accelerate drug discovery by reducing computational expenses. Additionally, the affordability of AI-powered patient data analysis may enable more precise treatment recommendations based on genetic, imaging and clinical data, advancing personalized medicine.

As DeepSeek continues to make AI more accessible and cost-efficient, MedTech companies must evaluate how to leverage this innovation to remain competitive. The broader implications of DeepSeek’s AI models could transform not just the medical sector but also biotech, diagnostics and personalized treatment strategies.

3 MedTech Companies to Watch

Here, we discuss three MedTech companies that are likely to ride the wave of success as AI model-related costs may come down with the availability of cheaper but at-par models from likely new entrants and Chinese competitors. Lower AI model costs should reduce research and development and deployment costs and boost expansion of AI-driven solutions in low-resource markets. A lower price for AI-based services may also drive adoption.

Zacks Investment Research

Image Source: Zacks Investment Research

Boston Scientific BSX has been actively integrating artificial intelligence (AI) across various facets of its operations to enhance patient care and streamline processes. The company has brought innovations like BeatLogic and the LUX-Dx Insertable Cardiac Monitor (ICM), which utilize AI to provide actionable, real-time insights, thereby improving patient and physician experiences.

AI is being employed to scan and detect cyber incidents, enhancing the organization's security posture. Additionally, AI-driven tools assist in creating marketing assets, optimizing outreach efforts. BSX can benefit from lower-cost AI models like DeepSeek by enhancing its AI-driven medical devices, diagnostics and remote patient monitoring solutions. With cost-efficient AI, BSX can improve real-time analytics in implantable devices, optimizing cardiac rhythm management and neuromodulation therapies.

Shares of BSX were up almost 0.8% in the past three trading sessions following the launch of the latest DeepSeek AI-model. In the past six months, BSX’s shares have gained 38.7% compared with the industry’s growth of 15.7%. The company is scheduled to report fourth-quarter results on Feb. 5. The Zacks Consensus Estimate for revenues and earnings per share (EPS) of $4.4 billion and 65 cents, respectively, implies 18.1% and 18.2% growth. Its Growth and Momentum score of ‘B’ reflects a continued uptrend going forward. BSX currently carries a Zacks Rank #3 (Hold).

Boston Scientific Corporation Price

Boston Scientific Corporation price | Boston Scientific Corporation Quote

Stryker SYK is enhancing its healthcare solutions by integrating artificial intelligence (AI) into its products and services. The company's acquisition of care.ai aims to create smart care facilities, utilizing AI to optimize clinical workflows and improve patient care. Additionally, Stryker's iSuite offers a customizable, integrated operating room ecosystem designed to increase safety and efficiency.

Incorporating cost-effective AI models like DeepSeek's R1 could further benefit Stryker by providing advanced problem-solving capabilities at a fraction of traditional development costs. DeepSeek's open-source approach allows for customization, enabling Stryker to tailor AI solutions to specific medical applications, thereby enhancing innovation and maintaining cost efficiency.

Shares of SYK were down almost 0.8% in the past three trading sessions following the launch of the latest DeepSeek AI-model. In the past six months, SYK’s shares have gained 18.4% compared with the industry’s growth of 15.7%. Stryker exited fourth-quarter 2024 on a strong note, wherein earnings and revenues beat the Zacks Consensus Estimate. The consensus mark for 2025 revenues and EPS of $5.7 billion and $2.84, respectively, implies 8.8% and 13.6% growth. Its Growth score of ‘C’ and Momentum score of ‘B’ reflect moderate movement in share price going forward. SYK currently carries a Zacks Rank #3.

Stryker Corporation Price

Stryker Corporation price | Stryker Corporation Quote

Tempus AI TEM leverages artificial intelligence (AI) to enhance precision medicine. Its AI-enabled platform, Tempus Next, identifies care gaps and provides clinicians with actionable insights at the point of care, supporting access to the most up-to-date, guideline-directed treatments. Integrating cost-effective AI models like DeepSeek's R1 could further benefit Tempus by providing advanced problem-solving capabilities at a fraction of traditional development costs. DeepSeek's open-source model enables customization, allowing Tempus to adapt AI solutions for specific medical applications, fostering innovation while optimizing costs.

Shares of TEM were down almost 1.2% in the past three trading sessions following the launch of the latest DeepSeek AI-model. In the past six months, TEM’s shares have gained 12% compared with the industry’s growth of 17.2%. Tempus is expected to report fourth-quarter results next month. The Zacks Consensus Estimate for 2025 revenues of $900.3 million implies 28.9% growth. Its Growth and Momentum score of ‘B’ reflects continued uptrend going forward. Its Growth score of ‘A’ and Momentum score of ‘C’ reflect moderate movement in share price going forward. TEM carries a Zacks Rank of 3 at present.

Tempus AI, Inc. Price

Tempus AI, Inc. price | Tempus AI, Inc. Quote

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Boston Scientific Corporation (BSX) : Free Stock Analysis Report

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Tempus AI, Inc. (TEM) : Free Stock Analysis Report

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