Nvidia founder and CEO Jensen Huang has come out in strong support of DeepSeek's R1 open source reasoning model, contradicting market concerns that the technology could negatively impact the chipmaker's business. In a pre-recorded interview with Alex Bouzari, CEO of DataDirect Networks, Huang called the R1 model "incredibly exciting" and emphasized its potential to accelerate the adoption of artificial intelligence (AI).

Huang's comments come almost a month after DeepSeek released the open source version of its R1 model, which sent shockwaves through the AI market and disproportionately affected Nvidia's stock price. The company's stock plummeted 16.9% in a single market day, wiping $600 billion off its market capitalization in just three days. However, Nvidia's stock has almost fully recovered since then, with the company set to report its Q4 earnings on February 26.

Huang attributed the market's reaction to a misunderstanding of the R1 model's implications. "I think the market responded to R1, as in, 'Oh my gosh. AI is finished,'" he said. "You know, it dropped out of the sky. We don't need to do any computing anymore. It's exactly the opposite. It's [the] complete opposite." Instead, Huang believes that the release of R1 will expand and accelerate the adoption of AI, making everybody take notice of the opportunities to have more efficient models.

The Nvidia CEO also highlighted the importance of post-training in AI development, which will remain a resource-intensive process despite advancements in pre-training models like R1. "Reasoning is a fairly compute-intensive part of it," Huang noted. This suggests that Nvidia's compute resources will continue to play a vital role in the AI ecosystem, even as open source models like R1 become more prevalent.

In related news, DeepSeek announced plans to open source five code repositories as part of an "open source week" event next week. This move is likely to further accelerate the development and adoption of AI technologies, potentially leading to more innovative applications and use cases.

The ongoing developments in the AI market underscore the rapidly evolving nature of the technology and its potential to transform various industries. As companies like Nvidia and DeepSeek continue to push the boundaries of AI innovation, it will be important to monitor their progress and assess the implications for the broader tech landscape.

In the meantime, Nvidia's stock recovery and Huang's comments have helped to alleviate market concerns over the company's prospects in the face of emerging AI technologies. With its Q4 earnings report on the horizon, investors will be watching closely to see how the company addresses the market reaction to DeepSeek's R1 model and its plans to navigate the shifting AI landscape.