Nvidia CEO Jensen Huang has pushed back against investor concerns that triggered a $600 billion market value drop, asserting that the market misinterpreted the significance of DeepSeek's new AI model.
"I think the market responded to R1 as an 'Oh my gosh, AI is finished,'" Huang said in a pretaped interview for Nvidia partner DDN. The selloff was sparked by the Chinese AI startup DeepSeek's release of its R1 reasoning model, which reportedly used lower-capability chips for development.
The market reaction wiped nearly 20% from Huang's personal net worth, though the company's stock has since recovered most of its losses. Investors had worried that major tech companies might reduce their demand for Nvidia's more advanced chips if AI models could be developed using less expensive alternatives.
Huang characterized DeepSeek's R1 model as "impressive" but emphasized that the market fundamentally misunderstood the ongoing need for powerful computing in AI development. "From an investor perspective, there was a mental model that the world was pretraining and then inference," he said. "Obviously, that paradigm is wrong."