DeepSeek’s Cheap AI Won’t Doom Nvidia, Says Former Intel CEO

The Chinese AI start-up DeepSeek sent shockwaves through the tech industry with its low-cost AI assistant, reportedly 20 to 50 times cheaper to train and operate than OpenAI’s models. This announcement triggered a massive stock market reaction, wiping nearly $600 billion from Nvidia’s market value as investors feared reduced demand for its high-end processors.

However, Pat Gelsinger, former CEO of Intel, believes the market’s reaction is misguided. In a LinkedIn post, Gelsinger argued that DeepSeek’s breakthrough is actually a positive development for the AI industry—and great news for companies like Nvidia.

Gelsinger’s Takeaways from DeepSeek’s Rise

Gelsinger, a veteran in the computing industry, outlined three key insights from DeepSeek’s success:

1. Lower Costs Expand the Market

Gelsinger dismissed fears that cheaper AI models would reduce demand for computing power. Instead, he likened the situation to the rise of PCs and mobile devices, where affordability drove mass adoption.

“The market reaction is wrong. Lowering the cost of AI will expand the market,” Gelsinger stated. “Today I am an Nvidia and AI stock buyer and happy to benefit from lower prices.”

He believes that affordable AI will encourage more widespread integration, ultimately growing the industry rather than shrinking it.

2. Constraints Fuel Innovation

DeepSeek’s ability to create a world-class AI model despite export restrictions and hardware limitations is a testament to innovation under pressure. Gelsinger pointed out that many of computing’s greatest advancements have come from operating under constraints.

3. Openness Drives Progress

Gelsinger also took a stand against proprietary AI systems, which he argues stifle innovation. He praised DeepSeek for adopting an open-source approach, which promotes collaboration and transparency.

“Open wins every time it is given a proper shot,” Gelsinger wrote. “AI is much too important for our future to allow a closed ecosystem to dominate.”

Why Nvidia Remains Strong

Gelsinger is not alone in questioning the market’s pessimism. While DeepSeek’s AI models are optimized for local devices like PCs and smartphones, training them still requires high-performance data center hardware—a market where Nvidia, AMD, and Broadcom reign supreme.

Daniel Morgan, senior portfolio manager at Synovus Trust Company, echoed this sentiment:

“The real money in AI is providing the chips for data centers. Today’s AI tech selloff is an opportunity to buy high-quality tech shares at lower prices.”

Even as companies like DeepSeek make AI more efficient, the demand for cutting-edge processors will only increase as firms like OpenAI and Anthropic continue scaling their models, requiring massive computing power.

Final Thoughts: A Market Overreaction?

DeepSeek’s breakthrough has undoubtedly disrupted the AI cost structure, challenging industry giants like Nvidia, OpenAI, and Microsoft. However, as Gelsinger pointed out, the situation is more complex than it seems.

While cheaper AI models open the door to wider adoption, they do not eliminate the need for high-performance GPUs in large-scale data centers. The future of AI hardware will likely be shaped by the balance between affordability and performance.

For Gelsinger, the message is clear: Don’t panic. Adapt, innovate, and embrace openness. As he put it, with a touch of humor:

“I’m buying Nvidia stocks—and I’m happy about it.”

 

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