Alright, let’s talk about DeepSeek—the latest AI company that’s got everyone either panicking or strategizing. A few weeks ago, some of the biggest names in tech lost billions in market cap, and fingers pointed straight at this Chinese startup. Why? Because DeepSeek allegedly trained a cutting-edge AI model on 800 old Nvidia A100 chips instead of the high-end H100s. If true, this would mean they cracked the code on making AI both cheaper and more efficient, which sounds like bad news for companies selling expensive AI chips… right?
Well, not so fast. There are two huge unanswered questions:
1. Did DeepSeek really use only A100 chips, or did they quietly get access to H100s?
- Some skeptics believe they might have had a secret stash of the newer chips, making the whole “cheap AI breakthrough” narrative questionable.
2. Even if they did use A100s, is this really a threat to Nvidia and AI stocks?
- Jevons’ Paradox suggests otherwise. Instead of killing demand for high-end AI hardware, a cheaper, more efficient AI model could actually increase demand by making AI adoption easier and more widespread.
Here’s the twist
Imagine if DeepSeek did make AI cheaper and more accessible. What happens next? More companies would jump into AI, accelerating adoption, pushing up demand for even more GPUs. Instead of hurting Nvidia, this would actually help them sell even more chips.
This isn’t just speculation—it’s what we’ve seen with every major technology shift. When something becomes cheaper, more people use it. And when more people use it, demand for better, faster, and more powerful versions explodes.
So what does this mean for AI stocks?
- In the short term, DeepSeek shook the market. Investors hate surprises, and when Nvidia lost $600 billion in market cap in a single day, everyone assumed it was a turning point.
- In the long run? If DeepSeek is legit, it could expand the AI industry, not shrink it. More AI adoption means more infrastructure, more GPUs, and more innovation.
We believe this will spur further demand, benefiting all players in the AI market. Time will tell.
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Disclaimer: This blog is for informational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. Views expressed are current as of the publication date and may change. Consult a qualified financial advisor to assess your investment objectives and risks before making any decisions. All investments carry risk, including loss of principal.
