Titled “Latest news on certain global developments in the AI space and its impact on NetWeb Technologies’ “business,” the notes claimed that the company made full use of the emergence of China’s artificial intelligence Upstart DeepSeek, which caused a huge disaster on Monday to the huge disaster of U.S. tech giant NVIDIA CORP, which received nearly $60 billion in the market range on Monday.
“DeepSeek paves the way for adoption of AI and further expands the market. By reducing cost barriers associated with advanced technology, it can enable more customers (who are hesitant to the high adoption costs) to access and leverage the appropriate computing resources…AI performance acceleration can be enabled by platforms such as DeepSeek, which, for example, will drive greater adoption of our solutions,” noted by the company’s investors.
Even though NetWeb doesn’t list any specific growth guidance, investors responded positively to the notes. The company’s stock hit 10% upper-level tour within the first hour of trading Wednesday and closed on this level ₹1607.65.
Chirajeet Sengupta, managing partner and technology analysis firm Everest Group, said that despite the threat of DeepSeek to the global AI status quo, AI service providers still have room for growth.
“There is a certain level of reaction in the market, and it will eventually be balanced. Given the geopolitical balance between the country and China, it is impossible to pass directly adopting the Chinese artificial intelligence model – space for recovery and growth for India’s AI operations,” Sengupta said.
Global AI policy changes
However, not everyone believes it. Two senior equity research analysts in Mumbai’s two brokerage firms, they demanded anonymity because their company did not formally track Netweb technology or its fellow citizens – ₹5,900-crore E2E Networks Limited, said that the decline in stock prices of the two companies is in direct correlation to multiple global incidents—former US president Joe Biden’s executive order leaving India out of a list of nations with unrestricted access to American chips, current president Donald Trump Jr’s announcement of ‘Stargate’ with an ‘America-first’ approach to AI development and data centres, and finally, China’s DeepSeek disrupting US tech giants Microsoft, Google, Nvidia and OpenAI.
“India has long been a service-first economy in the global technology supply chain. While it has successfully expanded it to nearly $300 billion in the industry, which basically contributes to domestic output, it must be noted that most or all of the core patents and intellectual property in AI are owned by the United States. This has led companies like E2E networks and NetWeb Technology to bet on a much lower cost to deliver the AI Cloud Compute infrastructure than their fellow North American and EU compatriots.”
To be sure, both E2E networks and NetWeb technologies have witnessed exponential growth over the past two years. E2E Network’s stock price is from ₹July 168, 2023 to Gaogao ₹Last November 5487.65, nearly 33 times. For NetWeb technology, its initial public offering ₹500 shares per share in July 2023 ₹By December last year, 3,030 people per share had increased by more than 6 times.
“Investors’ stellar growth and sharp returns come from the growth of global hype and the demand for generating AI. Due to the huge demand, NVIDIA-backed Comperute shortage, low-cost AI cloud service providers such as E2E networks and NetWeb Technologies become natural favorites for investors. If the U.S. decides to limit access to NVIDIA processors to these companies, investors will start to exit because the business model of low-cost AI cloud platform providers will be disrupted.”
The launch of DeepSeek in China further caused a decrease in demand for AI computing to create models, applications and services, which could affect cloud service providers. Every analyst said that is why investors may react positively to Netweb’s notes, and the notes said the company’s top-notch “growed more than 60% on a higher basis” as of the December quarter.
However, E2E Network’s stock price still hits a 5% lower loop in intraday trading on Wednesday, even though the 30-share BSE Sensex benchmark index scored 631 points in a day.
Emails sent to E2E networks and NetWeb technologies seek responses to their future growth trajectory and potential business hubs until press release time. Additionally, a NetWeb Technologies spokesperson did not respond to a request for comment Wednesday.
However, growth expectations remain – providing a glimmer of hope for both companies.
“Global technology issues, including the push from the US to push the US first strategy, may support Indian tech companies because it is unlikely that the US economy will completely eliminate technology outsourcing due to cost factors. That is, the market response will depend on the foreign institutional investors (FII) model, which is what led to the collapse of the Indian market in the past two weeks. In the long run, Indian tech services companies will have enough room to grow and recover from the current slowdown phase,” Sengupta said.
Jaspreet Bindra, co-founder of tech consulting firm AI & Beyond, further added that while always providing space for low-cost technology service providers, its long-term growth potential will depend on its ability to expand core innovations beyond cost factors. “The world will always need low-cost AI cloud platform operators, but besides a certain point, the critical growth phase of the enterprise will only occur if these Indian companies can develop core products and solutions to cater to the AI growth phase. This will give them greater value to investors in the long run.”
