DeepSeek has shaken the global AI market, traditionally dominated by American companies. Nvidia, a key AI accelerator manufacturer, has lost several hundred billion dollars in capitalization due to the shift. While industry leaders work to mitigate the impact, smaller manufacturers see an opportunity to scale up, CNBC reports.
“Developers are eager to replace expensive and closed OpenAI models with open-source models like DeepSeek R1,” says Andrew Feldman, CEO of Cerebras Systems, a startup producing AI chips. Competing with Nvidia, the company offers cloud services in its clusters. The release of DeepSeek R1 has triggered one of the highest surges in demand for Cerebras’ services. Feldman believes this event demonstrates that AI market growth will no longer be tied to a single company since open models do not depend on specific hardware or software. DeepSeek claims its model consumes fewer computing resources than American alternatives and trains without advanced accelerators.
Market Shift and Growing Demand
DeepSeek’s approach accelerates the deployment of AI accelerators, covering both model training and execution. Nvidia dominates AI training hardware, but many competitors see potential in running pre-trained models at lower costs. Training AI requires vast computing resources, yet inference—executing trained models—can be done on less powerful hardware. As a result, alternative accelerator developers report increased demand, with customers looking to leverage DeepSeek’s pre-trained models.
Industry experts predict that DeepSeek’s advancements will influence AI adoption across various sectors. Lower costs often lead to higher demand, a phenomenon known as the Jevons paradox. Startups like d-Matrix and Etched, specializing in AI accelerators, confirm this trend. “With the wide availability of smaller models, they have catalyzed the era of AI inference,” notes d-Matrix. Meanwhile, Etched reports a surge in corporate clients since the release of DeepSeek R1.
Despite Nvidia’s market dominance, its resources remain finite, notes NIX Solutions. Even a tech giant cannot meet the entire global demand for AI accelerators. This leaves room for smaller players to gain traction and expand their influence. We’ll keep you updated as the AI market continues to evolve with DeepSeek’s disruptive innovations.