Nvidia CEO Clarifies Misconceptions on DeepSeek's Market Impact

# Nvidia # DeepSeek # chips

Nvidia's founder and CEO, Jensen Huang, recently shared his thoughts on the market's reaction to DeepSeek's technological advancements, particularly its R1 open source reasoning model. In a pre-recorded interview with Alex Bouzari, CEO of DataDirect Networks, released on Thursday, Huang dismissed the notion that DeepSeek's R1 model spells doom for Nvidia's business. Instead, he described it as "incredibly exciting." Huang pointed out that the market seemed to panic, thinking, "Oh my gosh. AI is finished," when R1 was released. He emphasized that this couldn't be further from the truth, saying, "It’s exactly the opposite. It’s [the] complete opposite." According to Huang, R1's release is a positive development for the AI market, as it will speed up AI adoption rather than diminish the need for computing resources like those Nvidia provides. He highlighted that R1 is pushing the boundaries of what's possible in terms of model efficiency, which in turn is expanding and accelerating AI adoption. Huang also noted that despite DeepSeek's progress in pre-training AI models, the post-training phase remains crucial and demands significant computational resources. "Reasoning is a fairly compute-intensive part of it," he added. Nvidia chose not to offer additional comments on the matter. Huang's remarks follow DeepSeek's release of the open source version of its R1 model about a month ago, which caused a stir in the AI market and seemed to hit Nvidia particularly hard. On the day of the announcement, Nvidia's stock price fell by 16.9%, closing at $118.52 a share on January 27 after being at $142.62 on January 24, according to Yahoo Finance data. This drop resulted in a $600 billion loss in Nvidia's market cap over just three days. However, Nvidia's stock has nearly bounced back, opening at $140 a share on Friday, recovering most of the lost value within a month. The company is set to report its Q4 earnings on February 26, which may shed more light on the market's response. Meanwhile, DeepSeek announced plans to make five code repositories open source during an "open source week" event next week.

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