Nvidia has called China’s new DeepSeek R1 an “excellent” achievement in AI. The day before, on the back of DeepSeek’s success, shares of the U.S. chip vendor fell 17.8%, causing the company to lose about $620 billion in capitalization. As Bloomberg wrote, the Chinese company’s latest AI model rose to the top of Apple’s AppStore charts over the weekend. OpenAI CEO Altman also praised the release of the R1 model. He recognized that DeepSeek is a competitor to OpenAI
US chip vendor Nvidia said that the new R1 AI model released by Chinese startup DeepSeek is “a great achievement in the field of artificial intelligence,” Bloomberg writes, citing the company’s statement.
Nvidia believes that the Chinese company did not violate U.S. requirements restricting access to advanced U.S. chips when creating its technology. At the same time, many of Nvidia’s products cannot be sold to Chinese companies without licenses from Washington, the agency notes.
OpenAI CEO Sam Altman also praised DeepSeek’s R1 release. The Chinese artificial intelligence startup presented “an impressive model, especially considering the result-to-cost ratios,” he wrote on social network X (formerly Twitter; blocked in Russia). That said, Altman acknowledged that DeepSeek is a competitor to OpenAI, but noted that it is “very cool.” He also promised that his company will prepare several releases.
At the close of trading on Jan. 27, Nvidia’s stock was down 17%, wiping out $590 billion of the company’s capitalization. This was the record loss of market value for the day in the history of the U.S. stock market. In trading, Nvidia’s stock fell even further. DeepSeek’s success with a much smaller budget caused investors to question the multi-billion dollar sums spent by U.S. tech giants on chip makers, the Financial Times noted.
As Bloomberg wrote, DeepSeek’s latest AI model rose to the top of Apple’s AppStore charts over the weekend. This was proof that it is possible to develop powerful AI models at a lower cost, Union Bancaire Privee managing director Weisern Ling told the agency. The agency also pointed out that DeepSeek’s success affected other sectors. In particular, shares of energy companies fell sharply amid fears that demand for electricity from data centers will decrease.
In addition, on the background of DeepSeek’s success, the Nasdaq 100 index fell by 3% at the end of trading on January 27. This drop was the largest in the last six weeks, Bloomberg noted. As the agency pointed out, the capitalization of companies included in the Nasdaq 100 fell by almost $1 trillion compared to Friday, January 24. Nvidia lost the most.
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