Investing in AI: High risks, market volatility, and a shift toward business value
The rapid growth of artificial intelligence (AI) development companies has attracted investors worldwide, but the sector remains volatile, with high implementation costs and regulatory risks posing significant challenges. Assessing the measurable value of AI investments remains difficult, creating uncertainty about potential returns on investment, according to investment expert Radosław Jodko.
The instability of AI-related stocks was recently highlighted when USD 580 billion in market value was wiped off Nvidia’s stock in a single day, following a 17% drop in share price. The market reaction came after the emergence of DeepSeek, a Chinese AI model that is reported to be as efficient as American alternatives but significantly cheaper.
“The DeepSeek case demonstrates the dynamic and unpredictable nature of the AI market,” said Jodko. “We are still in the growth phase of AI, and both companies and investors are learning from these fluctuations. While some argue that AI is an overvalued investment, it is too early to make such claims. AI remains a transformative force, influencing business models and even social structures. However, what this situation proves is that no tech giant is invulnerable—not even Nvidia. It also highlights a new phase in the U.S.-China tech rivalry, with China proving that it can develop advanced AI without access to American chips.”
DeepSeek, a Chinese AI startup, has shaken Wall Street, impacting not only Nvidia but also other Big Tech firms. The reason? The model is reported to be comparable to OpenAI’s GPT-4 but at a fraction of the cost. While GPT-4’s training costs exceeded USD 100 million, DeepSeek reportedly required less than USD 6 million—a massive difference that has forced investors to reassess AI development costs and competitive advantages.
According to Jodko, the AI sector is entering a phase of “real accountability”, where investors and companies are shifting from experimentation to implementation. Businesses are now focusing on scaling AI solutions to drive profits, rather than simply testing AI’s capabilities.
A recent IBM Institute Business Value report, conducted with Oxford Economics in late 2024, found that 63% of executives expect AI to have a significant financial impact on their organizations within one to two years. Additionally, 46% of executives plan to scale AI solutions, focusing on optimizing existing processes and systems, while only 6% intend to continue experimental AI projects.
“The biggest challenge today is assessing AI’s measurable business value,” said Jodko. “Many investors and companies struggle to determine clear financial benefits from AI investments, leading to uncertainty about return on investment (ROI). For companies, the real difficulty lies not just in optimizing existing systems but in fundamentally transforming business models to integrate AI-driven services and innovation.”
Jodko believes that 2025 will be a decisive year in proving the real connection between AI investments and business profitability. A major shift is expected as lower AI computing costs—as demonstrated by DeepSeek—make AI more accessible and easier to implement across industries.
“The lower cost of AI computing power is a game changer. It will accelerate AI adoption, widen its range of applications, and make implementation easier for businesses. The effects of this shift will become evident very soon,” Jodko concluded.
While AI remains a high-risk investment, the industry’s growing focus on profitability, lower operational costs, and global competition is reshaping its trajectory. Investors will be closely watching whether AI development translates into sustainable long-term business value.
Author: Radosław Jodko