Nvidia on Monday said Chinese AI firm DeepSeek's advances show the usefulness of its chips for the Chinese market and that more of its chips will be needed in the future to meet demand for DeepSeek's services.

The company that lifted the tech industry and drove A.I. spending for the last several years, suffering the biggest one day wipeout of wealth in U.S. Monday.

A new Chinese AI model threatens to diminish the need for Nvidia’s most-expensive chips, but some say the concerns are overblown.

Chinese startup DeepSeek has achieved what many (including experts) thought impossible: create a foundational, competitive AI model for just $5.6 million. By comparison, OpenAI’s unreleased GPT-5 (codenamed “Orion”) reportedly requires $500 million for six months of training.

Nvidia staged a moderate rebound on Tuesday, rising as much as 3%, following a 17% drop the prior day. More broadly, major US indexes rallied after S&P 500 and Nasdaq 100 saw sharp losses on Monday amid concerns over the Chinese AI firm DeepSeek rapid and cost-effective advances.