Moonshot AI launch has traders revisiting "Jevons Paradox" playbook
SOXX•Earlier Live Markets items
EARLIER ON LIVE MARKETS:
- AIRLINES DROP, BUT TECH BOUNCE AND ENERGY KEEP STOXX AFLOAT CLICK HERE
- BEFORE THE BELL: OIL SURGE, HIGHER YIELDS KEEP EUROPE CAUTIOUS CLICK HERE
- RISING OIL, YIELDS RAIN ON AI PARTY CLICK HERE
Citi sees a positive catalyst for memory demand
So what are the implications? Citi's Lee calls it another Jevons Paradox for memory suppliers.
"All in all, even if Kimi K3 is widely utilized, we expect the demand for commodity memory including server DDR5 and eSSD to increase more," Lee says.
"Similar to the impact of DeepSeek, we think Kimi K3's launch is a positive catalyst for memory demand, as we expect another Jevons Paradox effect from the launch."
After a selloff on Friday, Europe's tech sector .SX8P is showing signs of a rebound on Monday, while Nasdaq futures NQcv1 are up 0.4% after the index dropped over 4% last week.
Markets revisit Jevons Paradox after Moonshot AI launch
Flashback to 18 months ago and markets were in panic mode as DeepSeek released its low-cost artificial intelligence model that many thought could lead to less demand for chips and tech hardware.
But a 19th-century theory became the talk of markets. The theory stems from coal consumption and steam engines.
The Jevons Paradox, named after William Stanley Jevons, theorised that as steam engines became more efficient, coal consumption increased rather than decreased as businesses were encouraged to use steam power much more widely.
