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In a recent interview with CNBC’s Jim Cramer during Nvidia’s annual GTC conference, CEO Jensen Huang delved into the implications of a new artificial intelligence model developed by the Chinese startup DeepSeek. Huang claimed that the innovative model, known as the R1, would necessitate significantly more computational resources than many industry experts initially anticipated.
Describing DeepSeek’s R1 model as “fantastic,” Huang highlighted its status as the “first open-sourced reasoning model.” He elaborated on its capabilities, which include breaking down complex problems into manageable steps, generating various potential answers, and validating the accuracy of its responses.
“This reasoning AI consumes 100 times more compute than a non-reasoning AI,” Huang stated, noting that this finding contradicts widespread assumptions in the tech community. “The conclusion was exactly the opposite of what everyone expected.”
The release of DeepSeek’s model in late January instigated a sharp decline in AI-related stocks, as investors became anxious about its potential to rival established market leaders while operating with lower energy and financial outlay. This resulted in Nvidia experiencing a staggering 17% drop in stock value within a single session, translating to a loss of nearly $600 billion—the largest one-day decline for any U.S. company on record.
Huang also shared insights into Nvidia’s contributions presented at the conference, detailing advancements in AI infrastructure tailored for robotics and enterprise solutions. He emphasized collaborations with major firms such as Dell, HPE, Accenture, ServiceNow, and CrowdStrike. Reflecting on the evolving landscape of artificial intelligence, Huang commented on the shift in focus from generative AI to reasoning models, foreseeing that global expenditures on computing capital could approach a trillion dollars by the decade’s end, predominantly driven by investments in AI.
“The opportunity for us as a percentage of a trillion dollars by the end of this decade is quite substantial,” he remarked. “We have significant infrastructure to develop.”
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