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DeepSeek, a Chinese AI startup, has significantly impacted Nvidia's stock value. On January 27, 2025, Nvidia's shares plummeted by over 16% after DeepSeek demonstrated its ability to train a state-of-the-art AI system using only a fraction of the Nvidia chips typically required.
This revelation challenged the prevailing belief that massive investments in data centers filled with Nvidia chips were necessary for developing advanced AI systems. DeepSeek's efficient approach, reportedly using only 2,000 specialized Nvidia chips compared to the usual 16,000 or more, has raised concerns about the sustainability of demand for Nvidia's products.
Consequently, investors are reevaluating Nvidia's business model and future growth prospects in the AI chip market.
