The Globe and Mail reports in its Friday edition that stock markets have been struggling recently due to Chinese company DeepSeek releasing a generative artificial intelligence model at a fraction of the cost of U.S. counterparts. The Globe's guest columnist Kean Birch writes that by making it open source, DeepSeek threatens existing business models and undermines the fragile financial foundations of the generative AI sector, says University of Calgary economics professor Trevor Tombe. Enormous amounts of investment have gone into the infrastructure deemed necessary for generative AI, including billions spent by the so-called Magnificent Seven -- Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla -- that now represent about 40 per cent, or $18-trillion (U.S.), of the market capitalization of the S&P 500. Nvidia lost 17 per cent of its market value on Monday. Mr. Birch believes generative AI is a bubble -- and the DeepSeek fallout confirms at least some of this view. The reason Mr. Birch thinks generative AI is a bubble is because so far key products and companies, such as ChatGPT, developed by OpenAI, are not profitable. As well, Mr. Birch says they do not look like they will be profitable any time soon.