Artificial intelligence (AI) has reached a new phase: The breakthrough of the Chinese startup DeepSeek shows that sophisticated AI models can now be realized with significantly lower costs and computing capacities. This lowers the barriers to entry for new players and increases competition in the AI sector. As a result, AI technologies could gain a foothold in various industries faster than expected and unleash their economic benefits. But what does this mean for the real estate industry? Our report sheds light on the impact on different sectors and shows where investors could benefit most.
The most important findings:
- Lower development costs and more competition
- So far, a few US tech giants have dominated the AI sector, as the development of powerful models is extremely expensive and resource-intensive.
- DeepSeek proves that advanced AI models can be developed with far less capital and computing power.
- This opens up the market to new suppliers and accelerates the speed of innovation.
- Accelerated AI adoption and economic benefits
- Increased competition is making AI solutions more affordable and accessible to businesses of all sizes.
- Numerous industries, from industry to medicine, could increase productivity and efficiency through cost-efficient AI applications.
- Examples from Germany and Italy already show the successful use of AI in the construction and production industry.
- Impact on the real estate market
The changes in the AI sector affect different real estate segments differently:
- Data centres: Long-term demand remains high as AI continues to generate larger amounts of data.
- Industry & Logistics: Automated processes and intelligent supply chains are creating new investment opportunities.
- Residential: Rising productivity and income growth could support the demand for housing.
- Retail: Optimized inventory management and operational efficiency increase profitability, but could be challenged by the e-commerce boom.
- Office properties: The increasing use of AI could cut jobs and further burden the already ailing office market.
Our conclusion:
The rapid advancements in AI technology, led by DeepSeek, are leading to increased competition and lowering the barriers to entry for new companies. This could accelerate the adoption of AI solutions across various industries and promote economic productivity gains. For real estate investors, it remains crucial to invest in sectors with long-term growth prospects and to take AI-supported market changes into account at an early stage.
