Nvidia, OpenAI's Sam Altman Respond To DeepSeek Developments

The entire AI complex sold off violently on Monday after China's "AI Sputnik" moment, driven by the low-cost DeepSeek chatbot, raised doubts about the market's future expectations for massive investments in new computing infrastructure and upgraded power grids to support large language models and other AI technologies. 

Uh-oh, Mag5... ROI concerns now enter the picture.

Goldman's Rich Privorotsky told clients Monday that DeepSeek is allegedly "40-50x more efficient than other large language models." 

"If you can do more with less, it naturally leads to the question of whether you need so much capacity," Privorotsky said. 

Hence NVDA's market cap lost more than half a trillion on Monday. 

Privorotsky continued, "From a few conversations I have had with various investors this morning, the initial thoughts are similar -negative capex impact and a meaningful change of narrative in the US AI space is worrisome, in terms of R and I in ROI." 

Following Monday's AI massacre, Nvidia has finally responded to DeepSeek's developments of cheaper and more energy-efficient LLMs, calling them an "excellent AI advancement" that complies with US technology export controls. 

"DeepSeek's work illustrates how new models can be created" using the Test Time Scaling technique, the chip giant told Bloomberg in an emailed statement, adding, "leveraging widely available models and compute that is fully export control compliant."

Bloomberg's Ian King pointed out, "The statement also appears to dismiss some analysts' and experts' suspicions that the Chinese startup couldn't have made the breakthrough it has claimed." 

OpenAI's CEO Sam Altman also responded to the DeepSeek development. On X, he called the R1 model "impressive, particularly around what they're able to deliver for the price." 

"We will obviously deliver much better models and also it's legit invigorating to have a new competitor! we will pull up some releases," Altman said. 

He continued:

Responding to Altman's posts, Autism Capital chimed in with a funny meme...

Hilarious. 

Latest on DeepSeek: 

• China's DeepSeek AI Moves The Capital Of Tech From Palo Alto To Hangzhou

• China's DeepSeek Bombshell Rocks Trump's $500BN AI Boondoggle

• Goldman Asks If China's DeepSeek is AI's Sputnik Moment

• How Goldman Is Trading The DeepSeek Shock

• 'Bad Things Can Happen' - This Chart No Longer Makes Sense If DeepSeek Is The Real Deal

• DeepSeek Pulls Rug Out On Nvidia, ASML

• DeepSeek May Trigger "Negative Capex Impact" As Peak Data Center Occupancy Forecast Faces Revision

As we noted yesterday...

In premarket trading, the AI complex has stabilized. Nvidia shares are up 3% as of 0730 ET after a 17% implosion on Monday.

Trump on DeepSeek: "The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win." 

Meanwhile, analysts at Bernstein told clients yesterday: do not panic. Read more: "Don't Buy Into The Doomsday": Bernstein's Lists 3 Reasons Why Today's Market Panic Is Extremely Overblown ...