It is common in Silicon Valley that no company has a larger gap than Nvidia, which is the world’s world’s world’s world’s world for Artificial Intelligence (AI). This was true until 27 January, when a Chinese firm called Deepsac, impressed an AI model, stating that it trains less than $ 6m, with a semiconductor veteran’s price about $ 600BN hole in the price of the veteran. Blowed, marked the largest one day loss. In the history of America’s stockmarkat. Think of it as equal to the 21st century of the shot from a trabuchet, the medieval contraceptive is able to reduce the palace walls in debris. Has Nvidia’s rescue eventually dissolved?
The company has not been a stranger for stockmarkat gyrations, either up or down. In more than two years of AI-related frenzy, its market value is not only above $ 3TRN, but has faced eight out of the ten largest single-day decline in stockmarket history. This reflects a tug-off-wore between two types of investors; Those who believe that Jensen Huang, Navidia’s leather jacked rockstar boss, is a seer and can maintain their firm’s monopoly and monopoly; And those who think that high prices of their firm’s products and shares are symbols of AI promotion, and are ready to fall.
Currently there is a benefit of doubt. Deepsek’s ability to produce AI model is almost capable of America’s best people, which looks as low and low-up-up graphics processing units (GPU), challenges the belief that the AI race wins the race For the chips requires dollar gajilians. Microsoft, Meta, Elon Musk’s XAI, and a joint venture known as Stargate, which includes Openai, Chatgpt’s manufacture Is of But, according to an internal formula of a large Nvidia customer, the lesson being taken from Deepsake is that, when it comes to training and running models, it may be possible to spend very little on processing power. This will be bad news for Nvidia. Its most advanced chips generate 90%-the gross margin of the plus, according to Jeffrey Imanuel, an investor who published a presence beer case for Nvidia two days before the market route.
To make cases worse, competition from rival chipmakers has become rigid. NVIDIA’s GPU is almost indispensable for training of large language model (LLMS). In estimates – the query of those models – it still has a lead, but has a lot of rival. Startups such as Groq are specifically designed for ultra-fast invention. NVIDIA’s largest customer, cloud giant Amazon, Google and Microsoft are also making custom chips to reduce their GPU dependence. An executive of a cloud provider says, “Markets hate single-source suppliers obstructs.” -Time Compute), which can tilt the market in favor of rival chipmakers.
Then there is a publicity question. Since Chatp closed the AI Gold Rush at the end of 2022, Nvidia is playing the last “pics and shovel”. But like investment in the early days of the Internet, the AI Boom is still more based on the belief that it is based on the belief that it will change everything compared to difficult evidence that it can generate returns.
However, a lot of investors about AI’s chip champion remain fast. Some wonder whether Deepsek has increased its thrifts to roast its native country over America, although others say its claims may be well admirable. Even if Deepsek trusted the powerful GPU less, there is speculation that it only trained its model by studying American results manufactured with whiztest chips.
The success of Deepsek can also adopt American rivals to double its AI investments for at least some time. Openai, which raises the GPUS to pursue the AI development limit, would respond to Deepsek with a “much better model”, its CEO, Sam Altman promised fast.
For competition, Nvidia bulls admit that the danger from rival chipmakers is real, especially in estimates. But its leadership is reinforced by its cuda software, which is widely used in AI, and networking gear that allows it to string its chips together for maximum efficiency in data centers. “Its gap is very wide. It is a system company, not a chip company, “Umesh Padal of an investment firm Thomavest.
All said, NVidia’s market share and its margin are obliged to fall, and perhaps as soon as the investors thought that before the Deepsek came to the scene. But there is still a lot of scope to remain a prominent player, which can explain why the price of its stock increased by more than 8% on January 28. And a wildcard remains: Mr. Huang is really a visionary, his fans believe him.
According to Daniel Pneumon of Futureum, a research firm, the boss of Nvidia, is a leader who always tries to be one step ahead of the competition. Already, he is looking beyond LLM, which is in danger of commodities, recently called “Physical AI”, which is planning to develop. This means that they mean robots, self-driving cars and thus.
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