Nvidia CEO Jensen Huang on DeepSeek's Potential Impact

Nvidia founder and CEO Jensen Huang recently addressed concerns regarding DeepSeek and its technological advancements, stating that the market has misunderstood the impact of the company’s developments. Speculation has circulated that DeepSeek's innovations could negatively influence Nvidia's business, but Huang took a different stance.

During a pre-recorded interview with Alex Bouzari, CEO of DataDirect Networks, released on Thursday, Huang expressed enthusiasm for DeepSeek's R1 open-source reasoning model. He described it as "incredibly exciting."

Huang mentioned, "I think the market reacted to R1 with a misunderstanding, thinking, 'Oh my gosh. AI is finished.'" He emphasized that the situation is quite the opposite, suggesting that there remains a strong demand for computing resources, specifically the types that Nvidia supplies. "We don't need to do any computing anymore. It's exactly the opposite. It’s the complete opposite," he added.

According to Huang, the introduction of R1 is beneficial for the broader AI market, as it will enhance the efficiency of models and stimulate increased adoption of AI technology. He noted, "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. And so it’s expanding, and it’s accelerating the adoption of AI."

Despite the improvements presented by DeepSeek in pre-training AI models, Huang mentioned that post-training procedures would continue to be demanding and vital. He pointed out that reasoning requires significant computational resources, saying, "Reasoning is a fairly compute-intensive part of it."

These remarks come in the wake of DeepSeek's R1 model release, which had a substantial effect on the AI market and appeared to particularly impact Nvidia. When the news of DeepSeek emerged, Nvidia’s stock plummeted by 16.9% in one trading day, erasing considerable market value. On January 24, Nvidia shares closed at $142.62. By the following January 27, the stock had dropped to $118.52, resulting in a loss of around $600 billion in Nvidia's market capitalization within three days.

Fortunately for Nvidia, the stock has since nearly recovered. As of Friday, it opened at approximately $140 per share, illustrating a significant rebound in value within a month. Additionally, Nvidia is scheduled to announce its Q4 earnings on February 26, and this announcement may clarify the market's reaction.

In conjunction with these developments, DeepSeek also declared its plan to open source five code repositories during an upcoming "open source week" event next week.

Nvidia, DeepSeek, AI