Chinese AI start-up's breakthrough challenges tech giants, causing Nvidia's stock to drop

From Nasdaq: 2025-02-21 06:10:00

A Chinese AI start-up created a large language model chatbot using just $6 million and a few thousand Nvidia GPUs, challenging tech giants. xAI’s Colossus supercomputer may have 100,000 GPUs, with plans for 1 million. Wall Street reacts: what if tech giants no longer need to spend billions on GPUs?

Despite concerns, Nvidia is safe as Amazon and Alphabet reaffirm massive capex budgets for data center infrastructure, including Nvidia GPUs. xAI is close to a $5 billion deal with Dell for servers. DeepSeek’s claims are doubted, causing Nvidia’s stock to drop.

Dell’s data center sales surged while consumer sales lagged. Investors get a rising dividend with Dell. The company’s stock dropped with DeepSeek news but offers a buying opportunity, trading below analyst targets. Watch for data center and Nvidia sales trends for Dell’s future growth.

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Read more at Nasdaq: 2 Artificial Intelligence (AI) Stocks to Watch in the Wake of DeepSeek’s Breakthrough