ANALYSIS: Deepseek’s AI Innovations Should Help Nvidia, Not Hurt It

The U.S. markets have been in a frenzy over the past few days thanks to a new AI model from Chinese company Deepseek. The market reaction has been challenging for chipmakers and semiconductors companies like Nvidia Corp (NASDAQ:NVDA) , Advanced Micro Devices Inc (NASDAQ:AMD), Arm Holdings (NASDAQ:ARM), and others.Nvidia experienced a historic drop in its stock price, plummeting nearly 17% and erasing over $589 billion in market capitalization—the largest single-day market cap loss for any company in U.S. history. Broadcom also saw a significant decline, with shares falling approximately 17%, while AMD’s stock price dropped by 4.89%. ARM faced a decline of about 8% on Monday, contributing to a broader selloff across the semiconductor industry.Despite the buzz around DeepSeek’s latest model, R1, the news is largely positive for chipmakers like Nvidia.

The market sell-off appears unwarranted and presents a potential long-term buying opportunity for investors.Deepseek is a secretive AI company based in China, backed by a parent quant fund called High-Flyer. The company’s whole thesis is to build Artificial General Intelligence (AGI) and open-source it for general use. While they’ve been building models and AI technology for a few years, they only recently captured the interest of the American press.The company made headlines for a few reasons: 1) the press misreported that Deepseek trained a reasoning AI model for …Full story available on Benzinga.com