Nvidia CEO Jensen Huang: Market Misjudged DeepSeek’s AI Breakthrough
Nvidia CEO Jensen Huang recently addressed misconceptions about DeepSeek’s open-source R1 reasoning model, calling it a catalyst for AI innovation rather than a threat to the chip industry. His insights came during a pre-recorded discussion with DataDirect Networks CEO Alex Bouzari.
Why the Market Reacted Incorrectly
Huang dismissed fears that DeepSeek’s R1 model signaled the end of AI computing demands.
- Misinterpretation: Investors initially saw R1 as a disruptive force, causing Nvidia’s stock to drop nearly 17% in a single day.
- Reality Check: Huang emphasized that R1 actually expands AI’s potential by proving models can be more efficient than previously thought.
The Bigger Picture for AI Growth
Huang highlighted two critical takeaways:
- Pre-Training vs. Post-Training: While DeepSeek’s advancements in pre-training are impressive, post-training remains computationally intensive—a key demand driver for Nvidia’s hardware.
- Market Acceleration: Open-source innovations like R1 encourage broader AI adoption, creating more opportunities for compute-intensive applications.
Nvidia’s Stock Recovery and Future Outlook
After a steep decline in late January—erasing $600 billion in market cap—Nvidia’s shares rebounded to near-pre-announcement levels by mid-February. The company’s upcoming Q4 earnings call on February 26 may provide further clarity on its strategic response.
DeepSeek’s Open-Source Momentum
Coinciding with Huang’s remarks, DeepSeek announced plans to open-source five code repositories next week, reinforcing its commitment to collaborative AI development. This move could further stimulate industry-wide innovation while validating Huang’s perspective on shared technological progress.
Nvidia declined to provide additional commentary beyond Huang’s statements.
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