The landscape of artificial intelligence is changing dramatically with the cost-effective AI models that a Chinese startup, DeepSeek, has successfully made, causing the global tech industry to shake. Chinese companies are showing strong demand for Nvidia’s H20 artificial intelligence chip because the demand for DeepSeek’s low-cost AI models is really high. This growth in ordered units puts into focus Nvidia’s indefinite superiority in the market, and at the same time, it silences arguments that DeepSeek could bring about a slack-off in the AI chip demand.
The tech giants Tencent, Alibaba, and ByteDance have increased the numbers of their H20 chip orders, which are designed for the Chinese market because of the US export controls. Not only are these companies dependent on the work of advanced AI chips for their internal use, but they also distribute cloud computing services that allow other companies to access and use the AI tools. The usage of DeepSeek’s models has also reached sectors other than major corporations, such as healthcare and education, where smaller companies are also buying AI servers set up with DeepSeek models and Nvidia H20 chips.
The advent of DeepSeek has called into question previous guesses about the AI market. Many at first wrongly believed it might happen so that the demand for computing power stalls or even drops due to the introduction of DeepSeek’s models. However, the reality has been different. More than ever, AI developments are becoming more central in our lives, which in turn is the major cause of the demand for inference-level computing power. This move in demand was surely observed by the investment community and market analysts as well.
While the core of DeepSeek’s inference optimization is still a matter of speculation as to whether the domestic market is actually benefitting the Chinese chipmakers’ domination, or the contrary, Huawei still continues to offer its products competing in the domestic market, Nvidia’s H20 further solidifies its position as the only chip that is competitive in China. Analysts predict that approximately 1 million H20 units will be shipped in 2024 by Nvidia and the company will collect a total of over $12 billion. The H20 has been made a front-line product that Nvidia is the only company that has been given the license to sell in China after the last round of US export restrictions that were put into force in October 2023.
The stimulus from the use of DeepSeek’s models is being seen as a positive change in various fields in China. Tencent has disclosed that it will conduct a market trial for WeChat users to apply DeepSeek’s AI technology to their messaging platforms, which mainly rely on this app to connect and interact. In the automotive industry, Great Wall has developed a DeepSeek-based system and arranged it within its vehicles’ onboard computers, thus showing the huge potential of AI technologies and their reasonable prices being sustainable across different domains.
DeepSeek’s growth, along with Nvidia’s H20 chips that are in high demand, are examples of the intricate connection between technology, markets, and geopolitical factors. Unquestionably, the forthcoming period is sure to witness other positive transformations as global companies are currently adjusting to the new era in America. Multinational corporations (MNCs) have to also deal with, probably, enormous transformations throughout the preset world of the IT industry.
