Jakarta, INTI – Nvidia CEO Jensen Huang has finally responded to the impact of the launch of the open-source AI model DeepSeek R1, which recently shook the AI market. Huang stated that investors overreacted and misunderstood the actual impact of DeepSeek’s technology on the chip and artificial intelligence (AI) industries.
DeepSeek and Nvidia’s Stock Decline
DeepSeek R1, introduced in January 2025, caught global attention due to its claim of requiring only $5 million in training costs. This news sparked panic among investors, causing Nvidia’s stock price to plummet by 16.9% in a single day, wiping out $600 billion in market capitalization. Huang’s net worth also took a hit, dropping by approximately 20% due to the turmoil.
However, further reports revealed that despite its seemingly low training cost, DeepSeek still relied on an AI infrastructure worth more than $1 billion. This fact demonstrated that AI’s computational power requirements remain high.
Huang: DeepSeek Drives AI Innovation, Not a Threat
In his statement, Huang emphasized that DeepSeek is not a threat to Nvidia but rather an innovation that accelerates global AI adoption. He argued that the old paradigm, which focuses solely on pre-training and inference as the main aspects of AI, is flawed. According to him, post-training still demands significant computing resources, meaning that demand for Nvidia’s chips remains strong.
“Investors assume that AI is only about pre-training and inference,” Huang said in a virtual event broadcast on February 20, 2025. “However, post-training is the most crucial phase in AI development. This process allows AI to solve problems more effectively and enhance prediction accuracy.”
Nvidia’s Stock Rebounds, Investors Await Financial Report
Despite the sharp decline, Nvidia’s stock began recovering in less than a month. By February 23, 2025, its stock price had climbed back to $140. Now, investors are eagerly anticipating Nvidia’s financial report, set to be released on February 26, 2025, which will provide a clearer picture of the competition with DeepSeek and challenges related to its Blackwell AI products.
Meanwhile, DeepSeek continues its innovation efforts, announcing plans to open five code repositories as part of its upcoming “Open Source Week” event.
The AI Industry Continues to Grow
The market’s reaction to DeepSeek highlights the dynamic growth phase of the AI industry. While concerns remain that cheaper AI models could reduce the need for computational power, Huang asserted that innovations like DeepSeek actually increase demand for AI chips.
This sentiment was echoed by AMD CEO Lisa Su, who described DeepSeek’s approach as a positive advancement for the AI ecosystem. As more companies adopt AI and enhance model efficiency, the demand for high-end chips, like those produced by Nvidia, is likely to continue growing.
Thus, while DeepSeek may have shaken the market, Nvidia remains in a strong position as a leader in the AI chip industry. If Huang’s predictions hold true, innovations like DeepSeek will not weaken Nvidia but rather strengthen market demand for more advanced and efficient technology.
Conclusion
The controversy surrounding DeepSeek and its impact on Nvidia illustrates how the AI market is constantly evolving and adapting to new innovations. Investors initially overreacted, but Nvidia’s stock recovery proves that the demand for AI computing power remains strong. Jensen Huang’s statement reinforces that innovations like DeepSeek should not be viewed as threats but as part of a larger AI ecosystem. As AI technology continues to advance, Nvidia is expected to maintain its dominance in the industry, with chip demand projected to rise in the future.
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