Legendary shorts: Signs of a bubble in the US stock market have been seen, and the biggest risk in the coming year is a Deepseek-like effect.

Jim Chanos, the legendary shorts who became famous for bankrupting the Long Group, said in an interview with Bloomberg that the biggest risk to the market in the next 6-12 months is unpredictable products like DeepSeek and that he has seen signs of a bubble in the US stock market. Furthermore, Chanos pointed out that the current market is being influenced by political factors, which may intensify in the future. During the Chinese New Year, the Chinese artificial intelligence company DeepSeek emerged with its latest language model, DeepSeek-V3, outperforming OpenAI's GPT-4o, Meta's Llama 3.1, and Anthropic's Claude Sonnet 3.5 in third-party benchmark tests, causing a huge shock in the market. Not only that, DeepSeek claims that DeepSeek-V3 was built at a cost of less than $5.6 million, a breakthrough in cost-effectiveness compared to the training costs of companies like OpenAI, Google, and Microsoft, which can reach billions or even hundreds of billions of dollars annually. This event also subverted the market's inertia of high-cost training models and caused a panic fall in the US stock market, with NVIDIA plummeting 17% in a single day and other tech stocks also suffering heavy losses. Legendary shorts: The biggest risk to the market is unpredictable products like DeepSeek. In this context, according to Bloomberg, Jim Chanos, the famous short investor and founder of Chanos & Company, said in an interview with Bloomberg that the biggest risk to the US stock market in the next 6 to 12 months will be unpredictable events, such as last month's DeepSeek crash: 'The real risk will come from unexpected events like DeepSeek that disrupt the market's existing understanding. By definition, these risks are unpredictable.' Chanos also pointed out that there are already signs of speculative bubbles in the market, but they have not reached the level of madness seen when the S&P 500 rose 27% in 2021. Therefore, he believes that at this stage, investors need to have the ability to distinguish the correct valuations of companies: 'If we cannot distinguish between high and low valuations of companies, capitalism will collapse. You shouldn't invest in Enron or Theranos, but in companies like Amazon.' Current market influenced by political factors. In addition to the DeepSeek incident, Chanos believes that the current market is being influenced by political factors, and this influence may intensify in the future. The part he is particularly following is the tariff policy proposed by US President Trump, especially the plan to impose a 10% tariff on China: 'A 10% tariff may not be enough. If the US government really wants to generate substantial revenue, it must significantly raise tariffs on China and the European Union. However, we have not seen such actions yet. What will happen in the next 30 or 60 days, whether there will be an escalation, remains to be seen.' Shorts 'Long' became famous for predicting consecutive failures. We know that in 2001, the largest accounting fraud in history, the 'Enron scandal,' caused the collapse of the Long Group, and Jim Chanos became famous for shorting Enron stocks in advance. However, Bloomberg points out that Chanos' investment decisions in recent years have been at odds with the market trend. For example, he shorted Tesla for five consecutive years, but ended up missing out on Tesla's big rise. In addition, he shorted the data center industry in 2022, only to see it become one of the biggest beneficiaries of the AI wave. Therefore, despite his past successes, investors still need to consider multiple factors in their judgment.