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- เผยแพร่เมื่อ 5 ก.พ. 2025
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A breakthrough has emerged from an unexpected source. A Chinese hedge fund has developed the DeepSeek R1 model, capable of matching the performance of OpenAI’s latest ChatGPT iteration (o1), but at just one-tenth of the cost. This disruptive approach drastically lowers the expense of developing and running AI, challenging the high-cost, high-investment model dominating the U.S. AI landscape. Could this lead to a slowdown in demand for Nvidia GPUs?
1. I had the opportunity to refine my thoughts after receiving audience feedback on DeepSeek's impact on Nvidia and the AI industry.
2. Many pointed out that increased efficiency will actually drive higher demand. This aligns with the classic demand curve, where lower prices lead to higher volumes. Microsoft CEO Satya Nadella also referenced the Jevons Effect in this context.
3. Previously, I commented that increased efficiency would reduce usage, thereby lowering demand for Nvidia chips. However, I realize I didn’t fully elaborate on the context behind that view.
4. I maintain my view that Nvidia's stock faces a higher risk of downside, and here’s my refined reasoning.
5. The key caveat is that demand must grow at a pace that exceeds the improvements in efficiency to sustain higher demand for Nvidia chips.
6. Another mental model that might apply here is the hype cycle. Every new technology experiences a peak of inflated expectations before crashing into the trough of disillusionment.
7. Over the past two years, we’ve seen the generative AI craze, accompanied by cloud giants rapidly building out their infrastructure. However, this has likely resulted in overcapacity. Anecdotally, when I surveyed people around me, very few have meaningfully incorporated AI into their workflows.
8. With improved efficiency, this overcapacity issue could worsen. As a result, cloud providers may not feel incentivized to continue stocking up on Nvidia chips.
9. A similar situation unfolded with Amazon during COVID. The company aggressively built warehouses, only to realize it had overcapacity. This led to warehouse closures and a $10 billion write-down, causing the stock to slump temporarily. Eventually, the business recovered, and so did the share price.
10. Something similar could be happening with Nvidia GPUs. The race to acquire these limited chips may have outpaced end-user adoption. This is extremely hard to estimate, and by the time the market acknowledges the overcapacity, it could already be too late.
11. Nvidia’s results for the next two quarters are likely to remain strong, as these will reflect pre-DeepSeek conditions and continued purchases by hyperscalers.
12. However, the following quarters will be the true test to determine whether demand wanes. If it does, it would indicate excess capacity, which could negatively impact Nvidia’s valuation.
13. Correcting this overcapacity could take 1-2 years. By then, AI developments are likely to stabilize along the slope of enlightenment, leading to more sustainable growth.
14. To be clear, I am not against AI-I use LLMs daily and firmly believe in its long-term potential. However, we may face a significant mid-term correction due to overcapacity, and improved efficiency could accelerate this issue.
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Thank you for sharing your insights.
Bytedance, Deepseek, BYD and many others rising to dominate markets in less than a decade. The Chinese guys must be so proud. Then there's Red Note to rub it in even more 😅
Is that the same BYD that were going rogue and driving into people and locking them inside their cars to burn alive?
Jai Hind. DeepShit, we Indians walk the talks to ban all China apps.
AI goes far beyond just a chat box (healthcare, cloud etc) for which highly advanced NVIDIA technology will be required.
Wait until China starts releasing their Taichi A.I photonic chips.
Precisely, Deepseek goes far beyond chatbot, they haven't even taken the trouble to develop voice like chatgpt. Obviously their field of conquest goes far, wide and deeper than we can fathom at this point.
Video generation is the big next step as well, and will requires a lot of GPU Power. NVDA has a lot of experience in real time video generation tech with their gaming branch.
Do you think this is the last development out of China? They have way more IT guys then America
Deepseek already tested huawei's chip and just lost 5℅ performance
In my opinion, NVIDIA won't have issue with Deepseek. NVIDIA is a hardware company. I feel like NVIDIA will benefit from it. NVIDIA like a big street with many lanes for Deepseek to drive on instead of a small road with 2 lanes or one-way street.
The hysteria is about needing less of them. But the demand will always be there no matter what. The hysteria is totally irrational.
Thank you for the timely update.
Deepseek will disrupt Open AI, Anthropic and other closed source for profit LLM'S. It will not disrupt Nvidia because they sell hardware that enhances computing power and compute will be used either way by AI or by other data processes.
it does, it just shows computing power ain’t everything anymore
I disagree mostly because in order to make models like that researchers usually work down from a base, as in they create very accurate heavier parameter models then research on how to reduce requirements while maintaining quality. Small efficient models like this usually come off the backs of much larger models which would require huge amounts of compute power that Nvidia offers.
I bought more NVDA. 😂😂😂It’s hilarious how little research people do on what the company does. BUY! That’s awesome for China. Happy new year!🎉
so far..deepseek answer looks quite good.. tried some prompt, quite similar answer compared to chatgpt and gemini
DeepSeek feels like having Jarvis right there with you
But Jarvis can't operate without the chips no matter how much they're required.
Neccessity is the mother of all inventions.
It would be good if Huawei chipsets or GPUs (e.g., Ascend 910B) be used in the future.
already, reported
AI LLM or other on ML etc is a much bigger disruption, and definitely more than just transformer, or in this case, just a chatbot.
not sure how a more efficiency chatbot will affect the demand on GPU chips. Does the deepseek have real case application, like chatgpt in AI agent for example..?
Even if deepseek doesn't get adopted, the mindset has been broken. Other models will start to strive for efficiency from now on. Overall that will lower chip demand
@DrWealthVideos
That doesn't change the mindset
be it Moore law, or Nvidia dominating by aggressively pushing out A100 to HB200 etc.
Computing power is always in demand
@@DrWealthVideos Fixed pie fallacy
Buy physical gold and silver to protect your wealth. I was excited for a possible breakout on Friday, only to see the price slammed yet again! However, I ordered more physical silver, because this bank party can only last until their vaults are drained. If the world is really using more silver than is being mined… those with silver will have the last laugh!
you have access to o1 with the 20dolar pack, not only with 200dolar, if you say it is limited access ok, but is not only for the 200 dolar pack.
now they're gonna have to make it free to stay in the game, otherwise they'll experience a huge exodus of users...
@@cidluiz deepseek isn't free so all they need to do is to lower the price per token.
And open ai has way more stuff then just a llm for text, so is still worthy to put money there even if it cost more, cause you have access to more stuff, like vision, voice etc.
So free only when a new better model comes out, or a few of them at least. and will be free for chatbot, not for inference, never.
@@kiiikoooPT Deepseek's Janus-Pro is the beginning of the end for those other openAi products as well... They're really are in deep problem (no pun intended)
DeepSeek just launch today ? If not, why the market only reacted today ?
Agreed I sense massive market manipulation and fud. I’ll be picking shares up
Thats what i saying about bitcon. A kid in his garage can wipe out Bitcon in 2 seconds.
"Also to much money in AI". There is enough computing power and connections to run AI.
Just need software to do it, AS you can see a person in their basement can do software.
Capitalism has entered the chat. Who would have thought AI would have competition.
I guess only you don't know? Ever since the introduction of GPT, followed by llama and the others, the LLMs have been commoditized. Not saying this as hindsight bias but everyone saw this coming, just not at this speed.
China with so many STEM Universities will definitely co-operate with the private sectors including hedge funds, Tencent, Huawei, Xiomi, Alibaba & more to jointly develop more and more advanced AI + related Tools.
There is no stopping China High Tech Development and Advancement in AI tools 😂😂
your room has a lot of echo, please invest in a mic, great content nonetheless
Does deepseek using Nvidia chips for training it's model?
Yes. But a fraction of what openai uses
@@DrWealthVideos no they use AMd
it uses less expensive NVidia chips A100
they use H800
@@selespeed3Now imagine if they aren't sanctioned. It would've been a demolition.
NVIDIA won't fall.
they will adjust the pricing to be much more reasonable
They have sold many GPUs.
No need for more GPUs in the market.
GPU demand will always be there no matter how advanced and cost effective AI technology is. You are correct.
@ yep.
despite NVDA stock drops 17% just today, the demand of GPUs still rising.
Local AI is a new trend that is just happening
@ZAcharyIndy Nvda actually rebounded 2% today. It dropped 17% yesterday.
please put to excel & share thanks
DeepSeek is a threat to OpenAi, for Nvidia, it is just a short term problem, but long term Nvidia could gain since DeepSeek made it easier to develop AI. But Nvidia biggest threat actually came from the US government. The more the US government restrict Nvidia export to China, the more determine the Chinese to develop their own AI chip, which already happen with Huawei. Once China catch up, it is game over for Nvidia.
isn't this a paradox? if Nvidia continues exporting to China, they will copy the shit out of the latest tech and catchup. If Nvidia bans export to China, they will science the shit out of themselves to develop their own chips. There's no way to change the timeline for China.
Just the opposite. US's policy is a threat to China's AI industry if the claim is real - there hasn't been a full disclose of their model, but not to Nvidia. Nvidia will be fine in the long run because the demand for chips will always be there no matter how advanced and cost effective AI technology is.
yeah, but DeepSeek is from China.....why do we want to use it? I still have strong confidence in NVDA since DeepSeek was built based on their training models.
precisely because it's from Great China, the world is confident
I think MSFT and Apple could benefit greatly from this. They use AI, but don't develop it or make the chips. So their existing compute infrastructure can suddenly be massively more powerful without buying more chips or power plaants.
Prof Richard Wolff leading US economist has been warning us since last year
The hedgefund guy who owned Deepseek must have made tons of money from shorting Nvidia when he launched Deepseek R1 into the market place. Well if he did, he deserved it hugely!😂
Holy Crap! Dogs and snakes aren’t exactly best mates. In fact, they hate each other. Trump is a fire dog (1946, Year of the Fire Dog); Xi is a water snake (1953). Trump may use his charm, with the typical Trump classics: “President Xi is a great guy, great leader, love working with him, just had a friendly chat with him on the phone.” Alternatively, Trump may bring fire and fury and go straight to the throat of the snake.
MAGA V MCGA, Fire V Water. Trump V Xi. American AI V CCP AI . Who will reign supreme? Watch this space.
China
@ a country without proper drinking water, nah.
In the world of metaphysics, water put out and therefore control fire.
If you can't tell the difference between nvidia or Ai.
Open office vs microsoft office, is Microsoft bankrupt?
I don’t why the U.S. is freaking out by the Chinese AI product Deepseek? Chinese always work more for less and the Americans always work less for more. That’s why most American companies have been out sourcing their production lines to China for more profits and benefits. And the U.S. companies have made the biggest profits they have never been able to without such move.
Not true based on population and GDP each Americans output is the equivalent of four to one Chinese. China is at best a copier of technology. Their satellites and military are all duplications of western inventions.
I just bought 50 shares of NVDia this morning to DCA and hold for 7 to 10 years.
Better to hold 🪙
Of course it will. But Nvidia could have its moat of the US government to protect it.
Sell all nvidia shares. It will be worthless soon.
It will not be worthless but definitely worth less.😂😂
Kinda like how BYD destroyed Tesla?
Nvidia is hardware. They are the single leader in that aspect.
If you trust China's government too, you are either naive, ignorant or a CCP shill.
not at all
Jai Hind. DeepShit for the brave Bulls.
Nah, I just bought a few thousand at $124 per share... only buy what you can afford to lose.🎉
They are not even competitiors to each others but in cooperation relationship 😂
That is not the right question
I am not surprised if China builds another NVDA 😂 They manufactured those chips and has all the info about those chips 😂 its not hard to make a copy of it shortly 😂😂 Good luck companies trusting China 😅
The last thing I'd trust is a chinese hedge fund
You are right ahahah
$Trump coin a much better investment
😂@@terrymcmaster2787
This Dr cures all😂
Buy buy on fake news 🎉
1. When DeepSeek acquired the NVidia GPUs, there were no export restrictions! 2. The book "A beautiful constraint" by Adam Morgan shows how to be successful despite restrictions.
how do you know that that there were no export restrictions? they release it only weeks ago, long after the restrictions, still trying to belittle the achievement, wait till they release a version that runs on RISC chips. it is a matter of time before NVIDIA will fall, not because they are the enemy but that since their chips is not available, there is a vacuum for RISC chips with GPU extensions.
It was a long time since I read computer science and built hardware, but I still have enough insight in these fields to note that Dr Wealth is not competent to draw his conclusions in this video. Nvidia is a solid investment because they are the only leading GPU manufacturer and AI relies on GPU´s. Does not matter if Deepseek or Chat GPT leads the development of AI.
Having said that, Chat GPT leads the development in AI! Leading the research in AI is much more expensive then developing cost-effective solutions. If Deepseek wants to lead the research in AI they will have to multiply their costs.
The Magnificent 7-Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla-collectively account for nearly $16 trillion of the S&P 500's $46 trillion market cap. These tech giants have poured billions into purchasing GPUs from Nvidia, driving its share prices higher, and banking on earning tens of trillions in returns from their investments in GPU-powered data centers.
However, the rise of DeepSeek's open-source models, which are 16 times cheaper to train and 30 times cheaper to run, threatens to upend this narrative. These cost efficiencies will erode the expected returns for the Magnificent 7, bursting the bubble. Say goodbye to closed-source AI monopolies and their $500 billion money moat. Ironically, the U.S.'s "Tonya Harding" approach to stifling competition is backfiring, accelerating the shift toward open-source solutions.
Ai and censorship doesn't go hand in hand.
Please sell all the Nvidia and I can buy more.
This will probably end Nvidia's insane revenue, margin and profit. Stock will deflate like a balloon.
Guess who killed AI....😂 AI itself
Guess who will buy graphics cards from nvidia😂😂...gamers again
DeepSeek is really good. AI is for the people, not for the select few capitalist & oligarchs and DeepSeek gave people these gifts. It's the true "Open AI".
Short answer: Not at all
AI motional damaaage
Something doesnt add up. When its too good to be true then most of time its not. The cost of their AI hasnt been verified or audited. The development cost seems too low
What does it matter? It’s open and free
@terrymcmaster2787 because the whole video is about deep Seek sinking Nvidia of how low the cost to develop this AI. It's not about being free or not. If it takes thousands of H100 gpu. A quick math and quick Google will tell you the hardware itself costs upwards of millions and into the billions.
Everything else is just empty talk. When the three giant mountains of the U.S. dollar, the U.S. military, and the U.S. media collapse, the United States will come to an end. We, the spectators, enjoy the show while eating the melons. Ha ha!
Please continue this fear mongering news ! Excellent to buy the magnificent 7 at discounted prices !! Thank you !!!
My prediction is that Chinese AI will rule
Thank u nostradamus
#DeepDiscount
Deep Seek feels like the tip tok of AI. Great on the outside, corrupt on the inside...
How do you know?
Overblown
Deep seek and China
Stay away 😂
Made in China 2025, its just the beginning
good job
It's free? How trustworthy is it? Hmm..
Its open source if you are worried of privacy unlike chatgpt you can run locally so its safe than usa gemini,gpt to rest
@@zexieofficial Amazing how naive people are in their trust of the CCP.
Amazing how naive people are thinking China is a Monster and enemy...too much brainwashing by western media LIES.
@@unrealeck Uncle Sam more trustworthy looking after you all the time.
@@Utube1024 precisely , after watching U sam do in the world, yet there are those who are mindlessly imprisoned / impoisoned
I find your english unintelligible.
It's Singlish. Listen more and you'll get used to it soon enough.
@@julianclegg1922No thanks.
US Tech monopoly is broken. Once China gpu is scaled up it is Game Over.
All these $tril valuation will disappear like mist.
😂
Jai Hind. Black swan event when you can see AI bubble is being squeezed in front of your eye.
A mickey mouse shitbox Chinese company (what do they make that's any good; tofu dreg anyone) won't "bring down" an elite market leading behemoth, so stop with the hyperbole.
Trump will say National Security Threats we must impose tariffs sanctions and restrict chips export to China 😂😂😂
Haha. Standard move. Unless US owns half deepseek
Containment breeds Innovation. The West needs to understand the Chinese survival culture. The more you contain, the harder they will innovate. Collaboration not Confrontation the way to go for the overall benefit of humanity.
Deep Spank
Deep sank
Easy copyright
Indian can't even copy...LOL
Nvda @$10
It's a rubbish. Dun believe just key in "great Leap forward".
There's no point in harking back 60+ years.
Yes, history is not important, just like you can forget your bank account tmr, it doesn't matter
chat gpt is shit
First try to speak English properly. I find it very challenging to understand you.
He's a Mexican immigrant, who barely got into the country from Mexico last year; this is his 4th language. give him a break.
How much do you earn for speaking better english?
@@Sonny111 😂
This style of English is normal in Singapore and Malaysia. Get more practice on Defense Politics Asia TH-cam channel :)