A Chinese company’s claim of a $5.6mn artificial intelligence breakthrough wiped almost $600bn from Nvidia’s market value on Monday, shattering Wall Street’s confidence that tech companies’ AI spending spree will continue and dealing an apparent blow to US tech leadership.
Yet many in Silicon Valley believe the broad sell-off is an overreaction to DeepSeek’s latest model, which they argue could spur wider adoption and utility of AI by radically lowering the technology’s cost, sustaining demand for Nvidia’s chips.
Pat Gelsinger, recently forced out as chief executive of Intel, was among those buying his former rival Nvidia’s stock on Monday. “The market reaction is wrong: lowering the cost of AI will expand the market,” he said in a LinkedIn post. “DeepSeek is an incredible piece of engineering that will usher in greater adoption of AI.”