While companies like DeepSeek may find success in certain market segments, they face an uphill battle against this massive capital advantage. In other words, claims that demand for Nvidia's premium chips will collapse simply don't align with market realities and the trajectory of AI development.

Despite the negative financial impact, Nvidia praised DeepSeek’s breakthrough. “DeepSeek is an excellent A.I. advancement and a perfect example of test time scaling,” a company spokesperson told Observer in a statement.