Bankless DeepSeek R1 & The Short Case For Nvidia Stock | Jeffrey Emanuel
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Jan 28, 2025 
In this discussion, Jeffrey Emanuel, an investor and technologist with a keen understanding of AI and value investing, unveils the disruptive potential of China's DeepSeek AI model. He reveals how this model, showing a 45x efficiency improvement over competitors, has shaken Nvidia's stock, catalyzing a panic in the market. Emanuel also dives into the complexities of AI inference costs and how reduced expenses could alter the profitability landscape for major tech players, challenging Nvidia's dominance in the semiconductor space.
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Market Crash
- Jeffrey Emanuel's article, "The Short Case for Nvidia Stock," contributed to a $2 trillion market drop.
- The article's virality, fueled by Chamath and Naval Ravikant, likely triggered the crash, not just DeepSeek's release.
NVIDIA's Vulnerability
- DeepSeek's efficiency gains are significant, but NVIDIA's high margins are the real vulnerability.
- Hyperscalers can build cheaper chips, even if less performant, and still save money.
Interconnect Advantage Eroding
- NVIDIA's GPU interconnect advantage is diminishing due to large, single-wafer chips.
- Companies like Cerebras are building chips that eliminate interconnect needs by putting everything on one wafer.