Jensen Huang, the founder and CEO of Nvidia, stated that the market misinterpreted the implications of DeepSeek’s technological innovations and their potential adverse effects on Nvidia’s operations.
During a pre-recorded interview released on Thursday with Alex Bouzari, CEO of DataDirect Networks, Huang described DeepSeek’s R1 open-source reasoning model as “extremely exciting.”
“The market seemed to react to R1 as though it signifies the end of AI,” Huang told Bouzari. “It appeared as if everything just fell into place and computation was no longer necessary. But it’s actually the opposite of that.”
Huang asserted that the launch of R1 will positively impact the AI sector and boost the adoption of AI technologies rather than suggesting that the need for computational resources—such as those supplied by Nvidia—has diminished.
“It’s prompting everyone to realize there are pathways to achieve far greater efficiency in these models than previously considered possible,” Huang stated. “And this is, in fact, leading to an increase and a faster adoption of AI.”
He also highlighted that, although DeepSeek has made significant strides in pre-training AI models, post-training will continue to be critical and resource-demanding.
“Reasoning is a relatively compute-heavy component of the process,” Huang commented.
Nvidia chose not to provide additional comments.
Huang’s remarks come nearly a month following the launch of DeepSeek’s open-source R1 model, which sent shockwaves through the AI industry and appeared to particularly impact Nvidia. The company’s stock plummeted by 16.9% in a single trading day after DeepSeek’s announcement.
On January 24, Nvidia’s stock closed at $142.62 per share, but by the following Monday, January 27, it had dropped significantly to $118.52 per share. This swift decline led to a loss of $600 billion in Nvidia’s market capitalization in just three days.
Since that decline, Nvidia’s stock has nearly fully rebounded. On Friday, it opened at $140 a share, indicating that the company has almost completely regained the value lost in about a month. Nvidia is scheduled to report its Q4 earnings on February 26, which is expected to address the market’s reaction.
In the meantime, DeepSeek announced on Thursday its plan to open five code repositories during its upcoming “open source week” event next week.
Compiled by Techarena.au.
Fanpage: TechArena.au
Watch more about AI – Artificial Intelligence
