Nvidia CEO Jensen Huang says market got it wrong about DeepSeek’s impact

Nvidia CEO Jensen Huang stated that the market misunderstood DeepSeek and its potential to negatively affect the chipmaker’s businesses.

Huang instead called DeepSeek’s open source reasoning model R1 “incredibly exciting” when speaking with Alex Bouzari CEO of DataDirect Networks in a Pre-recorded interviews that were released on Thursday

I think the market responded to “R1” as in “Oh my gosh.” Huang told Bouzari that AI was finished. “You know, the AI just appeared out of nowhere. We don’t have to do any computing. It’s the exact opposite. It’s the complete opposite. [the] Huang said the release of R1 was inherently good for AI and will accelerate adoption of AI, as opposed to this release implying that the market had no longer a need for compute resources – like those produced by Nvidia.

Huang said that the release of R1 is making everyone aware that there are opportunities for models to be more efficient than we thought possible. “And it’s expanding and it’s speeding up the adoption of AI.”

“Reasoning, a large part of it, is compute-intensive,” Huang added. Nvidia declined further comment.

Huang made his comments almost a month after DeepSeek’s open-source version of the R1 model was released. This release rocked AI in general, and appeared to have disproportionately affected Nvidia. Stock prices plummeted 16.9% on one day of trading after DeepSeek announced its news. According to Yahoo Finance, Nvidia closed its stock at $142.62 per share on the 24th of January. The stock fell rapidly the following Monday, closing at $118.52 per share. In just three days, Nvidia’s stock market value dropped by $600 billion.

Since then, the chip company’s stock is almost fully recovered. The stock opened Friday at $140 per share, meaning that the company has almost fully recovered the value it lost in a month. Nvidia reports its Q4 earnings will be announced on February 26and will likely focus more on the market reaction.

DeepSeek announced Thursday that it will open source five code repositories next week as part of “Open Source Week”. Becca is a senior TechCrunch writer who covers venture capital trends. She covered the same beat previously for Forbes and Venture Capital Journal.