Bill Ackman Questions DeepSeek AI's Hedge Fund Affiliate's Role in Nvidia's Sell-Off
Tuesday, Jan 28, 2025 10:22 pm ET
3min read 
Bill Ackman, the billionaire hedge fund manager and CEO of Pershing Square Capital Management, recently raised questions about the potential role of DeepSeek AI's hedge fund affiliate in Nvidia's recent stock sell-off. In a tweet, Ackman asked, "What are the chances that DeepSeek AI’s hedge fund affiliate made a fortune yesterday with short-dated puts on Nvidia, power companies, etc.? A fortune could have been made." This comment comes amidst a broader tech sell-off triggered by DeepSeek's announcement of its R1 AI model, which could match OpenAI's performance at significantly lower costs without using advanced chips.
DeepSeek, a Chinese AI startup, emerged from High-Flyer, an $8 billion quantitative hedge fund co-founded by Liang Wenfeng. The company's R1 model has sparked market concerns, leading to a $592.7 billion loss in Nvidia's market value and a 3.1% drop in the tech-heavy Nasdaq. Ackman's Pershing Square Capital Management holds a significant stake in tech giants such as Google parent Alphabet, according to 13F filings with the U.S. Securities and Exchange Commission.
OpenAI CEO Sam Altman acknowledged R1 as "an impressive model, particularly around what they’re able to deliver for the price," announcing plans to accelerate some product releases in response. Nvidia defended its position, stating that DeepSeek's operations "requires significant numbers of Nvidia [chips] and high-performance networking." DeepSeek's success using lower-cost chips raises questions about U.S. export controls on advanced semiconductors to China and the potential democratization of AI technology beyond traditional tech giants.
Ackman's concerns highlight the potential for hedge funds to profit from market disruptions, such as those caused by DeepSeek's announcement. Investors should be aware of the regulatory and ethical considerations when engaging in short-selling or other speculative strategies, including market manipulation, insider trading, disclosure and transparency, impact on companies and stakeholders, regulatory oversight, reputation, and integrity. If DeepSeek's hedge fund affiliate did engage in short-selling, it should have disclosed this activity and ensured compliance with relevant regulations and ethical standards.
In conclusion, Bill Ackman's questions about DeepSeek AI's hedge fund affiliate's role in Nvidia's sell-off raise important considerations for investors, particularly regarding the ethical and regulatory aspects of short-selling and market manipulation. As AI technology continues to evolve and disrupt traditional industries, investors must remain vigilant and adapt their strategies accordingly.
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