China has DeepSeek. It’s better and cheaper to make. It’s also open source and free, for now.
Hence it will kill the market for Nvidia chips.
Nvidia’s stock will fall through the floor today, maybe 14%. So will all its customers – Google, Microsoft, Meta – the erstwhile Magnificent Seven.
Panic is Wall Street’s middle name.
Today will be Mega Panic.
But…
AI’s endearing long-term advantages are not going away because someone in China has figured a way to do AI cheaper.
Hello. That’s been the name of the game in computing since Intel introduced the first microprocessor in 1971 with 2,300 transistors.
Nvidia’s latest Blackwell chip has 208 billion.
This week’s Economist has a big piece:
Uncomfortably close
Why Chinese AI has stunned the world
DeepSeek’s models are much cheaper and almost as good as American rivals
You can read it here:
I’ll post more today. — Harry Newton
