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Nvidia founder and CEO Jensen Huang said the market got it wrong when it comes to DeepSeek’s technological advancements and its potential to negatively impact the chipmaker’s business.
Instead, Huang called DeepSeek’s R1 open source reasoning model “incredibly exciting” while speaking with Alex Bouzari, CEO of DataDirect Networks, in a pre-recorded interview that was released on Thursday.
“I think the market responded to R1, as in, ‘Oh my gosh. AI is finished,’” Huang told Bouzari. “You know, it dropped out of the sky. We don’t need to do any computing anymore. It’s exactly the opposite. It’s [the] complete opposite.”
Huang said that the release of R1 is inherently good for the AI market and will accelerate the adoption of AI as opposed to this release meaning that the market no longer had a use for compute resources — like the ones Nvidia produces.
“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 said. “And so it’s expanding, and it’s accelerating the adoption of AI.”
He also pointed out that, despite the advancements DeepSeek made in pre-training AI models, post-training will remain important and resource-intensive.
“Reasoning is a fairly compute-intensive part of it,” Huang added.
Nvidia declined to provide further commentary.
Huang’s comments come almost a month after DeepSeek released the open source version of its R1 model, which rocked the AI market in general and seemed to disproportionately affect Nvidia. The company’s stock price plummeted 16.9% in one market day upon the release of DeepSeek’s news.
Nvidia’s stock closed at $142.62 a share on January 24, according to data from Yahoo Finance. The following Monday, January 27, the stock dropped rapidly and closed at $118.52 a share. This event wiped $600 billion off of Nvidia’s market cap in just three days.
The chip company’s stock has almost fully recovered since then. On Friday the stock opened at $140 a share, which means the company has been able to almost fully regain that lost value in about a month. Nvidia reports its Q4 earnings on February 26, which will likely address the market reaction more.
Meanwhile, DeepSeek announced on Thursday that it plans to open source five code repositories as part of an “open source week” event next week.
