Deutsche Bank’s George Saravelos warns that DeepSeek’s AI breakthrough could trigger a market correction reminiscent of the dot-com bust. While the innovation may boost long-term productivity and growth, the near-term impact could include a tech sector selloff, mild recession, and eventual dollar weakness. While Saravelos acknowledges the long-term benefits of lower-cost productivity gains and reduced inflation, he emphasizes that near-term market adjustments could be significant, particularly when combined with potential Trump administration fiscal measures and trade policies with China.
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