Nvidia praises DeepSeek’s AI model despite stock losses
Date
1/28/2025 2:57:27 AM
(MENAFN) US chip giant Nvidia has praised the R1 model launched by the Chinese AI startup DeepSeek, calling it “an excellent AI advancement.” However, Nvidia also pointed out that a substantial number of chips would be required to meet the demand generated by the model’s services.
The comments from Nvidia's spokesperson followed the release of DeepSeek's R1 model last week. This free AI assistant is marketed as using significantly less data than its competitors, offering a more cost-effective solution. The announcement triggered a massive selloff in tech stocks on Monday, resulting in substantial losses for chip companies, including Nvidia.
DeepSeek’s development of the R1 model demonstrates how new AI models can be created using widely available resources that are compliant with export control regulations. Nvidia's statement highlighted that the model is an example of "Test Time Scaling," a new method in AI development. The company also emphasized the importance of using Nvidia GPUs and high-performance networking to efficiently run inference processes, such as generating outputs from trained models.
Despite the innovative nature of DeepSeek's AI model, which has gained popularity by becoming the most downloaded AI app in app stores, surpassing ChatGPT, Nvidia's stock took a significant hit. Its share price, which closed at USD142.62 on Friday, dropped by around 17 percent to USD118.19 as of 2150 GMT, causing a decrease in its market capitalization of roughly USD500 billion.
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