In an illuminating conversation with CNBC’s Jim Cramer at Nvidia’s annual GTC conference, CEO Jensen Huang shed light on the revolutionary implications of DeepSeek’s new artificial intelligence model. The model, known as R1, is set to reshape perceptions within the tech industry, according to Huang, who described it as “fantastic” and noted its distinction as the first open-sourced reasoning model. Huang highlighted its unique ability to deconstruct problems incrementally, explore varying solutions, and verify the accuracy of its outputs, marking a significant leap forward in AI capabilities.
Contrary to widespread industry assumptions, Huang emphasized that the R1 model demands significantly greater computational power—approximately 100 times more than existing non-reasoning AI systems. “It was the exact opposite conclusion that everybody had,” Huang remarked, underscoring the model’s unexpected demands on computational resources. This revelation comes on the heels of a tumultuous period in the market. In late January, news of DeepSeek’s model catalyzed a drastic sell-off in AI stock, as investors speculated the new technology might undercut its competition by optimizing performance with less energy and cost. Nvidia itself experienced a staggering 17% drop in shares, marking the largest single-day loss for a U.S. company in history, with a reduction of nearly $600 billion in market capitalization.
During the conference, Huang further elaborated on Nvidia’s own strides in AI infrastructure, vital for both robotics and enterprise applications. He also spotlighted strategic collaborations with industry leaders such as Dell, HPE, Accenture, ServiceNow, and CrowdStrike, partnerships poised to explore these opportunities and deepen the company’s involvement in shaping AI’s future trajectory. Reflecting on the evolving landscape of artificial intelligence, Huang noted the burgeoning shift from generative AI models to those focused on reasoning, hinting at a paradigm shift in AI applications.
Looking ahead, Huang forecasted a substantial increase in global computing capital expenditures, predicting they could reach a trillion dollars by the decade’s end, with AI poised to claim the lion’s share of this investment. “Our opportunity as a percentage of a trillion dollars by the end of this decade is, is quite large,” he stated, emphasizing the substantial infrastructure groundwork still to be laid.
Jim Cramer’s interview offered insights not only into technological innovations but also into the broader economic implications of these advancements. As always, Cramer invites those interested in his investing strategies to join the CNBC Investing Club for a deeper understanding of market movements, and reminds viewers that the CNBC Investing Club Charitable Trust holds shares of Nvidia and CrowdStrike.
This report draws attention to an era-defining shift in both AI technology and market dynamics, providing investors and industry participants with a detailed analysis of current trends and developments. The wide-ranging insights offered by Nvidia’s CEO highlight the far-reaching consequences of these technological advances, signaling a transformative period in the AI sector.
Original Source: https://www.cnbc.com/2025/03/19/nvidia-ceo-jensen-huang-why-deepseek-model-needs-100-times-more-computing.html
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Publish Date: 2025-03-20 04:57:00
