Nvidia may face new competition as DeepSeek challenges the need for high-end AI chips, says Fitch
AI chipmakers like Nvidia, according to Fitch Ratings.
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Challenging AI chipmakers
DeepSeek asserts that its AI models can run efficiently using simpler, lower-cost chips, which could challenge the $50 billion in quarterly expenditures currently made by hyperscale cloud providers on advanced AI infrastructure, reported GuruFocus.
Fitch said that if DeepSeek’s claims hold true, this could force a change in AI development, making it more cost-effective and potentially slowing down investments in expensive chips.
Broader tech industry to benefit
The rating agency predicts that a shift towards more affordable AI solutions could benefit the broader tech industry, with companies focusing on profitability. While AI spending remains high, they also expect a boost from a new personal computer refresh cycle that could help maintain demand, as per the GuruFocus report.
However, open-source AI alternatives, like those offered by DeepSeek, could accelerate innovation in the semiconductor industry, as per the report. If DeepSeek’s models reach technical parity with major players like Nvidia, this could disrupt Nvidia’s dominant position in AI model training, according to Fitch.
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