THE END OF NVIDIA’S FAIRY TALE? Lessons from the DeepSeek Disruption

By Oliver Inderwildi

Chinese startup DeepSeek has slashed AI training costs by 95%, threatening NVIDIA’s silicon empire and sparking fears of a tech power shift.
But could this efficiency revolution actually fuel AI adoption and demand for computing power, turning NVIDIA’s apparent crisis into an unprecedented boom?

Key Takeaways:

1. DeepSeek’s Efficiency Breakthrough: Cuts training costs by 95% and boosts efficiency 45 times reducing the demand for advanced microchips
2. The Compute Shift: Less compute (computing power demand) works, but reasoning models thrive on more test-time compute, shifting focus to inference.
3. Nvidia’s Competition Heats Up: Giants like Google and Amazon, plus startups like Cerebras, threaten Nvidia’s dominance.
4. AI Demand Will Soar: Efficiency boosts will drive exponential compute demand, not reduce it.
5. Innovation Disrupts Constantly: Rapid AI innovation makes adaptability key for investors and stakeholders.
6. Ultimately, its about Power: Recent breakthroughs, this time by the Chinese, are part of a race for technological dominance and geopolitical power.

If you’re an AI geek and investor like myself, the recent news from DeepSeek probably hit you like an existential crisis with a spreadsheet. On the one hand, the results were staggering: this…