DeepSeek Phenomenon Won’t Make AI Developers Spend Less on Nvidia Chips, Experts Say

Revelations surrounding Chinese startup DeepSeek, which allegedly created an advanced language model at a significantly lower cost than Western competitors, have made many investors nervous. Wedbush representatives, however, are confident that the companies are ready to continue spending decent money on Nvidia Blackwell accelerators.

Image source: NVIDIA

Recall that the thesis of the “AI skeptics” in light of the DeepSeek breakthrough implied that the ability of developers of large language models to get by with weaker hardware resources would reduce demand for expensive and advanced Nvidia hardware. Wedbush Securities analysts are convinced that this will not happen. Following another regular trip to Asia and communication with electronics suppliers, they claim that none of those wishing to develop their AI infrastructure intend to slow down the pace of expansion of specialized capacities after the hype around DeepSeek.

In the case of Nvidia’s Blackwell products, demand continues to far exceed supply. “None of Nvidia’s customers wants to lose their place in line for the brand’s next-generation chips,” the authors of the research note explain. According to Wedbush estimates, 10 to 15% of all IT budgets will be allocated to cover AI needs this year. Capital expenditures of the seven largest tech companies together could increase by about 50% to $325 billion. Many companies will only accelerate their adoption of artificial intelligence this year, according to Wedbush representatives.