NVIDIA's Stock Plunges 17% Amid AI Breakthrough: DeepSeek
1min read NVIDIA Responds to 17% Stock Price Plunge: DeepSeek Is a Remarkable AI Advancement
On January 27th, NVIDIA's stock price plummeted by 17% at the close of the U.S. stock market. In response to this significant drop, NVIDIA issued a statement highlighting the remarkable advancement in artificial intelligence represented by DeepSeek, a cost-effective Chinese AI model developed by High-Flyer, a quant trading company. DeepSeek's research demonstrates how to leverage widely available models and compute, fully complying with export control regulations, to create new models. The inference process requires a large number of NVIDIA GPUs and a high-performance network. NVIDIA acknowledged three scaling laws: the enduring laws of pre-training and fine-tuning, as well as the new law of test-time scaling.
The emergence of DeepSeek has sparked concerns about the viability of current AI projects and has led to a significant decline in the market cap of AI cryptocurrencies. Four of the top five AI coins have suffered heavy losses, with RENDER and VIRTUAL both down over 13%, and FET and INJ dropping 9% and 11%, respectively. The total market cap of AI cryptocurrencies has fallen by 10% to $37.4 billion in the past 24 hours. This decline comes amid the rise of DeepSeek, which has raised doubts about the future of AI applications and the dominance of major players like NVIDIA and OpenAI.
The disruption caused by DeepSeek has also been felt in the stock market, with pre-market losses experienced by major AI companies such as NVIDIA, Microsoft, and Meta. NVIDIA, for instance, is down 11.46% pre-market, highlighting the uncertainty caused by this development. The ripple effects of DeepSeek's emergence are being felt across the industry, as the stock prices of major AI companies and AI-related cryptocurrencies continue to fluctuate.
