Here’s the Worst-Case Scenario for Nvidia Stock

The AI industry was rocked in recent days with the release of an open source AI model from Chinese start-up DeepSeek that can compete with the best AI models from U.S. companies despite purportedly costing just $6 million to train. While cheap, powerful AI models are a great thing for companies looking to deploy AI, it’s potentially terrible news for Nvidia (NASDAQ: NVDA). The bull thesis for Nvidia, which dominates the market for powerful AI accelerators that are necessary to train the most advanced AI models, relies on the assumption that each successive generation of AI models will require more and more computational horsepower to train and run.