The introduction of a new language model by Chinese firm DeepSeek caused a significant drop in Nvidia's stock price, indicating potential shifts in the AI landscape. Nvidia, which has benefited immensely from the AI boom reliant on its GPUs, faces uncertainty as DeepSeek suggests that training high-quality AI models could be achieved using older, less advanced chips. This revelation raises concerns about the sustainability of Nvidia's profits going forward. Despite the sell-off in Nvidia, major software companies like Meta showed resilience in their stock prices, implying that they may not be directly affected by this shift.
Nvidia's market value fell 17% following the launch of China's DeepSeek, indicating a potential major shift in the AI business model and chip reliance.
DeepSeek's ability to train LLMs with older Nvidia chips could disrupt the current reliance on high-end GPUs, affecting Nvidia's profits significantly.
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