In a quarterly earnings call on Wednesday, Nvidia CEO Jensen Huang had some surprising commentary on DeepSeek R1, the controversial AI model that has exploded in popularity over the past few months.
DeepSeek is a new AI model that quickly became a ChatGPT rival after its U.S. launch in December 2024. According to the model's developers, DeepSeek was trained for far less money and with less powerful hardware than ChatGPT, yet it performs on a similar level. Those shocking claims were part of what triggered a record-breaking market value loss for Nvidia in January.
Given its meteoric rise, it's not surprising that DeepSeek came up in Nvidia's earnings call this week, but what is surprising is how CEO Jensen Huang addressed it.
"Excellent innovation": Jensen Huang spotlights DeepSeek R1
Nvidia's quarterly earnings call on February 26 closed out with a question about DeepSeek, the now-infamous AI model that sparked a $593 billion single-day loss for Nvidia. Huang doesn't seem to be holding a grudge about the loss, though, commenting:
"DeepSeek R1 has ignited global enthusiasm. It's an excellent innovation. But more importantly, it has open-sourced a world-class AI reasoning model. Nearly every AI developer is applying R1, or chain-of-thought or reinforcement learning techniques like R1 to scale their models' performance."
Considering the market disruption DeepSeek caused, one might expect Huang to bristle at the ChatGPT rival, so it's refreshing to see him sharing praise for what DeepSeek has accomplished.
It's important to note that Huang specifically highlighted how DeepSeek could enhance other AI models since they can copy the LLM's homework from its open-source code. While DeepSeek cost Nvidia billions, its investors may be hoping DeepSeek's innovation will drive demand for Nvidia's GPUs from other developers, making up for the loss.
Huang seemed to back that attitude up, noting, "Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter."
Unfortunately for DeepSeek, not everyone in the tech industry shares Huang's optimism. Qualcomm CEO Rene Haas predicted in an interview last month that DeepSeek will "get shut down," at least in the United States.
Haas's prediction seems to be based more on political factors than the actual tech behind DeepSeek. As he briefly pointed out, "Think about it . . . if you’re not going to allow a TikTok, why would you allow this?"
On top of that, DeepSeek still has to prove itself in the competitive AI market. While it has some advantages, ChatGPT has still proven superior in other ways and OpenAI will certainly be ramping up development to stay ahead. Plus, DeepSeek is facing privacy concerns similar to those TikTok has had to contend with for years now, which could drive some users away.
It remains to be seen how DeepSeek will fare in the AI arms race, but praise from Nvidia's Jensen Huang is no small feat. We'll have to wait and see if the innovation he highlighted from DeepSeek continues.
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