The stock market is trembling! Nvidia, the giant of AI chip production, loses more than 500 billion dollars in value, while its shares plummet by around 17 percent. The reason? A new competitor from China, which could turn the AI market upside down. DeepSeek, an open source model that allegedly performs better in tests than well-known giants such as ChatGPT, is causing nervousness. But is this really the end for Nvidia and co? And what is behind the Chinese AI development? We have the facts.
China's AI ambitions: More than just hot air?
A few years ago, China set itself the goal of becoming independent of the Western world in terms of high-tech and AI. However, the recent success of DeepSeek is putting this ambition to the test. The question many are asking themselves: Does China really have the ability to develop competitive AI chips, or is there more Western technology behind DeepSeek's success than it first appears?
A look at the current US sanctions shows that China has been cut off from Western high-end technology - especially when it comes to the production of specialized AI chips such as Nvidia's H100. Nevertheless, DeepSeek appears to have developed a remarkable model that is even said to outperform ChatGPT and other AI systems in tests. But how is this possible when the underlying technology is so difficult to access?
The secret technology behind DeepSeek
According to insiders, such as Alexandr Wang, CEO of Scale AI, DeepSeek is not quite as "made in China" as it first appears. Wang explained that DeepSeek may be using around 50,000 H100 chips from Nvidia, which is in direct conflict with US export controls. DeepSeek could therefore access Western computing power in a roundabout way - either by hiring cloud services or through middlemen from Southeast Asia who resell Nvidia hardware.
The fact that DeepSeek is emerging as a serious competitor despite this potential use of Western technology shows how complex the global supply chains for technology are today. And when Musk - as he did recently on Twitter - refers to the connection between China and Western technology with a brief "obviously", then perhaps this "obvious" truth should not be dismissed so lightly.
What does this mean for Nvidia and the future of AI?
Despite the huge buzz surrounding DeepSeek, the market remains dominated by the big players such as Nvidia and OpenAI. They not only offer the necessary computing power, but also the infrastructure to develop AI models on a large scale. DeepSeek may be an interesting competitor, but the question remains: Can China really compete with the market leaders without Western technology?
The current development should not tempt investors to panic sell quickly. Even if China is making progress, this does not mean that Nvidia and other Western companies are now obsolete. The race for the best AI technology is far from over.
The tech cold war: how geopolitical tensions could affect the future of AI
One thing is clear: when it comes to technology, geopolitical tensions and legal gray areas are almost always involved. The connection between Chinese AI development and Western hardware shows once again how complex the technology trade is today. It will be exciting to see how the USA and other Western countries react to this "backdoor technology". But as is always the case with such developments, whoever is seen as the winner today could be overtaken by the next innovation tomorrow. Perhaps we are indeed witnessing a "tech cold war" in which every step is on legally thin ice.
