Nvidia CEO Jensen Huang Addresses Investor Concerns About DeepSeek's AI Advancements

Nvidia CEO Jensen Huang Addresses Investor Concerns About DeepSeek's AI Advancements

In a pre-recorded interview released on Thursday, Nvidia CEO Jensen Huang addressed investor concerns about DeepSeek's recent advancements in artificial intelligence (AI). DeepSeek, a Chinese AI firm owned by hedge fund High-Flyer, released a competitive, open-source reasoning model named R1 in January. The firm claimed that the large language model underpinning R1 was built with weaker chips and a fraction of the funding compared to predominant, Western-made AI models.

This news caused investors to sell off Nvidia stock, resulting in a $600 billion loss in market capitalization. Huang himself temporarily lost nearly 20% of his net worth in the rout. However, the stock has since recovered much of its lost value.

Huang attributed the dramatic market response to investors' misinterpretation of DeepSeek's advancements. He emphasized that the AI industry still needs computing power for post-training methods, which allow AI models to draw conclusions or make predictions after training. As post-training methods grow and diversify, the need for the computing power Nvidia chips provide will also grow.

you ask an AI a question, and you instantly got an answer," Huang said. "I don't know whose fault it is, but obviously that paradigm is wrong."

Huang acknowledged the importance of pre-training, but emphasized that post-training is the "most important part of intelligence. This is where you learn to solve problems." He also praised DeepSeek's innovations, stating that the energy around the world as a result of R1 becoming open-sourced is "incredible."

Huang's comments may serve as a preview for Nvidia's first earnings call of 2025, scheduled for February 26. DeepSeek has become a popular topic of discussion on earnings calls for companies across the tech spectrum, from Airbnb to Palantir.