During a January 23 CNBC interview, Alexandr Wang, the CEO of Scale AI, said that DeepSeek has approximately 50,000 H100 Nvidia (NVDA) chips. However, due to U.S. export controls, DeepSeek cannot publicly discuss this information. Wang also stated that although DeepSeek may have more chips than expected, it will still face limitations due to chip controls and export restrictions. Elon Musk, the CEO of EV maker Tesla (TSLA), seemed to agree with Wang’s assessment after he responded with “Obviously” to a post sharing Wang’s interview.
Shares of Nvidia plunged in today’s trading after DeepSeek revealed that its AI model is able to outperform the best models from U.S. companies at only a fraction of the cost. However, if the firm is not disclosing how many chips it actually has, then the cost of its AI model might actually be much higher than the stated $5.7 million.
Nevertheless, investors got spooked and sold off their chip stock holdings due to fears that demand for GPUs could decline as a result of DeepSeek’s advancements. Still, Cantor and UBS analysts argue that this could actually increase demand for GPUs.
Is NVDA a Good Stock to Buy?
Turning to Wall Street, analysts remain bullish on NVDA stock, with a Strong Buy consensus rating based on 36 Buys and three Holds assigned in the past three months. After a 90% rally in its share price over the past year, the average NVDA price target of $177.56 per share implies an upside potential of 49.8% from current levels.
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