But as Nvidia chief executive Jensen Huang noted after the firm published its results on Wednesday night, the latest trend in AI for reasoning models – chatbots that essentially show their thinking and workings as they answer queries – requires even more compute power and are therefore still driving demand up for Nvidia products.
AI firms including OpenAI, DeepSeek and Anthropic have all started to roll out reasoning models, which they say take longer to think, breaking down problems into smaller ones and then trying to solve them step by step, something the AI industry calls chain of thought reasoning.
This rise was despite the company briefly losing 595 billion dollars (£469bn) in market value earlier this year following the sudden appearance of Chinese AI firm DeepSeek, which claimed to have developed models on a par with US market leaders but for a fraction of the cost and using lower priced Nvidia chips.
AI chip giant Nvidia’s sales have remained strong despite the rise of DeepSeek because new AI models that “reason” are driving sales, the company said.
Nvidia has seen its value rocket in the last year as the AI boom has taken hold and its chips – a vital source of the compute power needed to run the most powerful AI models – have become more in demand.
