Shares of NVIDIA Corporation crashed 19.98% in the last two sessions on concerns over Chinese artificial intelligence (AI) DeepSeek. Nvidia stock closed 16.86% lower at $118.58 in the previous session on Nasdaq. On Friday, the stock fell 3.12% at $142.62. On Monday, the stock opened lower at $124.80 and touched an intraday low of $116.70 per share. The firm lost over $600 billion in market capitalisation in the previous session.
DeepSeek R1 is a large-language model that is seen as rival to ChatGPT and Meta while using a fraction of their budgets.
DeepSeek AI model is as powerful as GPT-4, but requires far less computing power.
The innovation has triggered concerns that demand for energy-intensive AI infrastructure could falter, sending ripples through the markets.
Nigel Green, the CEO of global financial advisory giant deVere Group said this isn’t a sign of decline—it’s a transformation.
“DeepSeek’s breakthrough signals a shift toward efficiency in AI, which will redefine both energy and AI markets. The opportunities for investors willing to act now are enormous. DeepSeek’s model combines cutting-edge algorithms to slash the energy demands of AI training and deployment."
“This challenges the assumption that AI’s growth is tied to ever-increasing energy consumption. While the market is reacting to short-term uncertainty, efficiency-driven AI models will expand adoption into new markets and industries," added Green.
DeepSeek is funded by Chinese quant fund High-Flyer. Reportedly, it had access to about 50,000 of Nvidia’s H100 AI GPUs, which are from the last generation of advanced AI chips.
DeepSeek claims R1 matches—and in some cases surpasses—ChatGPT in areas like mathematics and coding while being significantly more cost-effective.
Unlike previous Chinese AI models, which often followed a US-led blueprint, R1 is an innovative leap. It uses a hybrid architecture and a “chain of thought” reasoning method to break down complex problems step by step—similar to how GPT models operate but with a focus on greater efficiency.