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AsianFin -- Nvidia Corp., a key driver behind the surge in artificial intelligence (AI) investments, has asserted that the emergence of advanced AI models capable of generating more complex outputs will only amplify the demand for computing infrastructure.
CEO Jensen Huang addressed concerns sparked by Chinese startup DeepSeek’s R1 AI model, which some feared could reduce the need for high-performance chips and servers in the future. Huang dismissed these worries as unfounded during a meeting with analysts and investors at Nvidia’s GTC conference in San Jose, California, on Wednesday.
“The understanding of R1 was completely wrong,” Huang stated. “Computation demand is much higher.”
Following his remarks, Nvidia’s shares climbed as much as 2.4% in New York trading, rebounding from a 14% decline earlier this year.
Nvidia, which has become the world’s most valuable chipmaker after a remarkable growth spurt over the past two years, is now working to convince a broader range of industries to invest in AI technology. The company emphasizes that the economic benefits of AI are within reach. However, as investor scrutiny intensifies in 2025, questions remain about whether customers will sustain their spending on AI infrastructure.
Earlier this year, DeepSeek fueled these concerns by releasing its AI model, claiming it delivered powerful capabilities at a lower cost. Despite this, Nvidia’s major customers have since reaffirmed their commitment to spending on AI infrastructure. Additionally, a recent Bloomberg Intelligence analysis revealed that expenditures by leading data center operators are rising faster than initially projected.
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