sb.scorecardresearch

Delhi Election Result 2025 in association with

Camlin

Published 18:18 IST, January 27th 2025

DeepSeek Sends Nvidia Shares Tumbling: All You Need To Know About the Chinese AI Startup

he disruption has raised questions about Nvidia’s ability to maintain its marketshare in the face of rising competition from emerging players.

Reported by: Business Desk
Follow: Google News Icon
  • share
AI Statrtup
Representation Image | Image: Pexels

Nvidia Corporation, a global leader in Artificial Intelligence (AI) hardware and software, recently saw its shares plunge after the emergence of DeepSeek, a Chinese AI startup, sparked investor concerns about growing competition in the artificial intelligence sector.

DeepSeek’s Disruptive Foray

DeepSeek, an AI company based in China, has unveiled its advanced AI model, DeepSeek-V3, which boasts cutting-edge capabilities at a fraction of the cost of traditional AI hardware. With a focus on efficiency and affordability, the model has the potential to challenge Nvidia's dominance in the AI chip market, particularly in regions where cost sensitivity is paramount.
The AI startup revealed that it is leveraging China's rapidly evolving tech ecosystem to develop solutions that cater to global markets. There are some reports which claim that DeepSeek’s AI systems require less dependency on high-end GPUs, which could decrease demand for Nvidia’s flagship products in the near future.

Impact on Nvidia

Nvidia, which has enjoyed a stronghold in the AI chip industry, saw its shares tumble by over 3 percent in premarket trading following the announcement of DeepSeek-V3. The disruption has raised questions about Nvidia’s ability to maintain its marketshare in the face of rising competition from emerging players.

Furthermore, a few analysts have also pointed out that DeepSeek’s entry could lead to a significant shift in the dynamics of the global AI market, where affordability and innovation increasingly drive adoption. 
While Nvidia is yet to respond to the competitive threat posed by DeepSeek, but the company's investors are already bracing for potential headwinds.

Global Implications

DeepSeek’s rise is symbolic of China's growing influence in the AI landscape. The company’s ability to develop advanced models at competitive prices reflects the broader trend of Chinese tech firms aiming to rival Western giants.
While Nvidia remains a dominant player with extensive resources and an established customer base, DeepSeek’s emergence highlights the increasing challenges that established companies face in a rapidly evolving industry.

What’s Next for Nvidia and DeepSeek?

As the AI race gets hypercompetitive, Nvidia may need to innovate further and explore strategic partnerships to maintain its competitive edge. Meanwhile, DeepSeek's potential to disrupt the market could lead to increased scrutiny and regulatory challenges, particularly in international markets.
 

Updated 18:25 IST, January 27th 2025