Jensen Huang on DeepSeek: Nvidia CEO Addresses Market Reaction

Nvidia CEO Addresses Market Reaction to DeepSeek's AI Model

Jensen Huang, founder and CEO of Nvidia, stated that the market misinterpreted the significance of DeepSeek’s technological progress and its potential impact on Nvidia’s business.

Huang's Positive Assessment of DeepSeek's R1

Huang described DeepSeek’s R1 open source reasoning model as “incredibly exciting” during a pre-recorded conversation with Alex Bouzari, CEO of DataDirect Networks. This interview was made public on Thursday.

He refuted the notion that R1 signaled the end of demand for AI computing power. Huang asserted that the market’s response – suggesting AI development no longer required substantial computational resources – was “exactly the opposite.”

Accelerated AI Adoption

According to Huang, the release of R1 is beneficial for the AI landscape. It will, in fact, hasten the widespread adoption of AI technologies rather than diminishing the need for computing infrastructure, such as that produced by Nvidia.

“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,” Huang explained. He believes this efficiency will expand and accelerate AI adoption.

The Continued Importance of Compute Resources

Huang emphasized that while DeepSeek has achieved advancements in pre-training AI models, the post-training phase will continue to demand significant computational resources.

He added that reasoning, a crucial aspect of AI functionality, remains a particularly compute-intensive process.

Nvidia's Stock Performance and DeepSeek's Impact

Huang’s comments followed the release of the open source version of DeepSeek’s R1 model, which initially caused considerable disruption in the AI market and notably affected Nvidia’s stock price.

Nvidia’s stock experienced a substantial decline following the announcement. The share price fell from $142.62 on January 24 to $118.52 on January 27, according to Yahoo Finance data.

This rapid decrease resulted in a loss of approximately $600 billion from Nvidia’s market capitalization within a mere three days.

Recovery and Upcoming Earnings Report

However, Nvidia’s stock has largely recovered. As of Friday, the stock opened at $140 per share, nearly regaining the value lost in the immediate aftermath of DeepSeek’s announcement.

Nvidia is scheduled to release its Q4 earnings report on February 26, where the market reaction to DeepSeek’s R1 model is expected to be addressed.

DeepSeek's Continued Open Source Contributions

In related news, DeepSeek announced plans to open source five code repositories during an “open source week” event scheduled for next week.

This initiative demonstrates DeepSeek’s commitment to fostering collaboration and innovation within the AI community.