Nvidia CEO Jensen Huang recently said that the market is wrong about DeepSeek’s negative impact on AI chipmakers. Huang appeared in an interview with DataDirect Networks CEO, Alex Bouzari and discussed the prospects of DeepSeek’s R1 model.
Jensen Huang referred to DeepSeek’s R1 model as “incredibly exciting.” However, he emphasized that the market’s reaction to DeepSeek is rather outplaced. He said, “I think the market responded to R1, as in, ‘Oh my gosh. AI is finished.” He added that the market thought we don’t need computing anymore, while in reality, “It’s [the] complete opposite.”
Nvidia’s CEO clarified that R1 open-source reasoning model’s release is actually beneficial for the wider AI industry and it will increase the adoption of AI tech. However, this does not mean that the market no longer requires hardware resources such as those that Nvidia develops. He added, “It’s making everybody take notice that, okay, there are opportunities to have the models be far more efficient than what we thought was possible.” Due to this realization, AI adoption is going to accelerate and expand.
Even though DeepSeek has made it less costly to train models and has made noticeable advancements in pre-training AI models, hardware and computer resources are still needed for post-training. In fact, post-training still remains an important part of AI development. Huang said, “Reasoning is a fairly compute-intensive part of it.”
Nvidia’s stock has recovered after its initial reaction to DeepSeek’s disruption
Initially, when DeepSeek launched its R1 open-source model, it caused a ripple effect in the entire AI market. As a result, Nvidia’s stock plunged 16.9% in a single day after news of DeepSeek’s cost-effectiveness broke out. On 24th January, Nvidia’s stock closed at a price of $142.62. However, by 27 January, it had already dipped to $118.52 per share, resulting in a loss of approximately $600 billion within 3 days. It’s stock is priced at $134 per share at press time.
Since then, Nvidia’s stock has almost recovered. Its stock opened at $140 per share on Friday after a complete recovery in a month. On February 26th, Nvidia is set to report its Q4 earnings, which is expected to improve its position in the market even more. At the same time, DeepSeek has announced that it will be releasing its open-source code repositories in the coming week.
DeepSeek said in an announcement, “We’re a tiny team exploring AGI. Starting next week, we’ll be open-sourcing five repos, sharing our small but sincere progress with full transparency.”
Its goal is to allow developers and researchers to download and build on its open-source code. As part of this reveal, DeepSeek will release five repositories, which is a major move considering that other competitor companies like OpenAI and Anthropic are too secretive about their data, models, and repositories.
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