One of the hottest stories from the week has been the DeepSeek AI model and its implications for the sector. Yet while most of the focus has been on AI stocks, other businesses, from other areas of the economy may be impacted. Here are a couple of FTSE shares that investors could consider that stand to gain from the latest news.
Capex spending in focus
One takeaway from the news is that AI models can be built for a fraction of the cost that many thought. DeepSeek reportedly only cost $6m to train. This angle could help to benefit BT Group (LSE:BT.A). The growth stock is up 21% over the past year.
BT Group has huge potential to integrate AI into its existing system. It has recently focused on pouring money into the nationwide full fibre rollout. This is now past peak capital expense (capex) spending, with the latest H1 results stating that “our cost to build continues to reduce, enabling us to increase this year’s build target to 4.2 million with no additional capex spend”.
Going forward, this could free up cash flow and other resources to be directed towards AI. By implementing advanced AI-driven tools, BT could optimize bandwidth allocation, predict faults, and improve overall user experiences, especially in its fibre and 5G networks. It could use the advanced AI models to help with cutting-edge cybersecurity solutions. This would allow it to protect its infrastructure and offer enhanced services to enterprise clients.
The fact that models can be built cheaper than expected means that these projects could now be well in scope and in budget. The gains from implementing could ultimately help to reduce costs and make the business more profitable.
However, regulatory risk is something to be aware of. BT is heavily regulated and so changing price caps and policy shifts from the government can impact the firm.
A sector ripe for change
Another business that could do well is AstraZeneca (LSE:AZN). The FTSE 100 company is already spending large amounts on AI developement. The key areas being targeted are in drug discovery and data analysis. In my view, it hasn’t scratched the surface of the enhancements and efficiencies that could be gained from AI.
For example, the research and developement (R&D) process is still quite manual. Making greater use of AI in this area to take out some human tasks not only reduces the potential for error but reduces costs in the long run. The breakthrough with DeepSeek could mean that more R&D funds get allocated to running more complex AI models, given that the cost isn’t as high as previously thought. With more models popping up, it could even encourage AstraZeneca to announce a partnership around building bespoke models for the pharmaseuctical sector.
Investors need to be careful as this is a very competitive industry. This is a risk going forward, as market share can quickly get eaten away.
The stock is up 6% over the last year. Yet it could stand to rally significantly if it really embraces AI going forward. Given the potential for this sector to benefit from the integration, I think the share price could do well. I believe both stocks are worthy of consideration for an investor.
