China's AI newcomers shake up the tech giants? Nvidia (NVDA.US) asserts that DeepSeek demonstrates the future of AI still requires a significant amount of chips.
1min read The world's largest supplier of artificial intelligence training chips, Nvidia Corp. (NVDA.US), said that the new model released by Chinese startup DeepSeek is an "outstanding AI advancement" and complies with US technology export controls.
"DeepSeek's work demonstrates how to create new models using test-time scaling techniques, which are based on widely available models and fully comply with export controls," the company said in an emailed statement, indicating that Nvidia believes the Chinese company did not violate US export restrictions on advanced chips during its technology development. Under US policy, most of Nvidia's high-end products are not allowed to be sold to Chinese companies without US government approval, which is usually hard to obtain.
The statement also appeared to refute the skepticism of some analysts and experts who doubted that the Chinese startup could achieve its claimed technological breakthrough.
Nvidia's stock price has risen more than five times in the past two years, but it plunged nearly 17% on Monday, the biggest single-day drop in its history, wiping out nearly $600 billion in market value, a record for a single-day loss in US stock market history.
Nvidia's stock price plunged nearly 17% to close at $118.42, the biggest single-day drop since March 16, 2020, when the pandemic was in its early stages. The company had just surpassed Apple (AAPL.US) as one of the world's most valuable companies last week.
The market is concerned that DeepSeek's new product may reduce the demand for Nvidia's expensive hardware. However, Nvidia pointed out in the statement that running AI models still requires a lot of its products.
"AI inference requires a lot of Nvidia GPUs and high-performance networking," the company said.
