As a total noob, is there any reason to believe that DeepSeek's breakthroughs would not also be subject to scaling laws? If these breakthroughs can be scaled, then the big market rout seems premature IMO.
I think it's less about Deepseek and more about the seeming or real erosion of the moat. It takes away the secret magic if other companies are just doing it and selling the product not doing what the other leaders are doing.
A lot of people will go to some other AI service provider on principle alone. A lot of people will move for cost reasons. That may not leave many left.