DeepSeek Just Dealt Nvidia Stock a Potentially Major Blow

DeepSeek has already rattled Nvidia Corporation (NVDA) investors once with its low-cost artificial intelligence (AI) models. Now, the Chinese startup may be posing a far more direct competitive threat. Reports that DeepSeek is developing its own inference-focused AI chip could reduce its reliance on Nvidia’s GPUs, highlighting a broader industry trend in which leading AI developers are increasingly designing custom silicon to lower costs, improve efficiency, and gain greater control over their AI infrastructure.

The project is still in its early stages, with the company engaging chip design, foundry, and memory partners while quietly expanding its chip engineering team, but the implications could be significant.