DeepSeek has called into question Big AI’s trillion-dollar assumption

It’s no wonder that some Nvidia investors are questioning their faith in unlimited demand for the most powerful AI chips.

Recently, Chinese startup DeepSeek created state-of-the art AI models using far less computing power and capital than anyone thought possible. It then showed its work in published research papers and by allowing its models to explain the reasoning process that led to this answer or that. It also scored at or near the top in a range of benchmark tests, besting OpenAI models in several skill areas. The surprising work seems to have let some of the air out of the AI industry’s main assumption—that the best way to make models smarter is by giving them more computing power, so that the AI lab with the most Nvidia chips will have the best models and shortest route to artificial general intelligence (AGI—which refers to AI that’s better than humans at most tasks).