Nvidia is under significant pressure as the emergence of Chinese AI startup DeepSeek has introduced AI models that rival Western chatbots in performance at a fraction of the cost. DeepSeek's R1 model, which is reported to be 27 times cheaper than comparable offerings from established players like OpenAI, poses a direct challenge to Nvidia's dominance in the AI hardware market. The technological advancements by DeepSeek, such as their mixed-precision training framework, have allowed them to achieve massive memory savings without sacrificing performance, reducing the number of GPUs required for training. This innovation directly impacts Nvidia's core business, as it disrupts their high-margin business model and underscores the competitive threat to Nvidia's AI hardware solutions.
The GraniteShares 2x Long NVDA Daily ETF (NVDL) experienced a significant decline, dropping 21.68% to $57.26 at 9:00 AM on Monday, January 27.