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DeepSeek deals blow to Nvidia with its cheap, revolutionary AI model, and shares fall 13%.

The success of the new artificial intelligence model R1 from the Chinese company DeepSeek, launched last week, caused a drop in the stock price of chip manufacturer Nvidia (NVDA) on Monday, the 27th, and could destabilize the dominance of the U.S. company OpenAI.

Same efficiency, lower price DeepSeek’s major achievement was developing an AI model capable of competing with its U.S. rival without needing to use Nvidia’s most advanced processors. In statements to the Wall Street Journal, Anthony Poo, founder of a startup that uses AI to predict financial investment returns, said he decided to switch from OpenAI’s model to DeepSeek’s because he didn’t want to pay for technological capabilities he wasn’t using. DeepSeek’s success could also encourage more companies to develop AI models without using Nvidia’s most advanced chips, which would directly impact revenue growth and, consequently, the stock price of the manufacturer.

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