Michelle ThompsonNvidia, a leading player in the AI-driven semiconductor industry, reported continued strong business performance despite concerns over a potential market bubble following the rise of Chinese AI firm DeepSeek last month.
The company’s AI chip sales reached over $39 billion (£30.7 billion) in the three months ending January 27, marking a 74% increase from the previous year. Nvidia has benefited from surging demand as major tech firms seek its high-performance chips to process vast amounts of data for AI model training.
DeepSeek, however, recently claimed it had trained its chatbot using less advanced and more cost-effective chips. This announcement triggered a sharp drop in Nvidia’s stock earlier in the month, causing ripples across the market.
Investor confidence stabilized after major firms like Meta reaffirmed their commitment to existing AI investment strategies. Nvidia CEO Jensen Huang downplayed concerns over shifting demand, emphasizing that future software development would rely on machine learning rather than traditional hand-coding, requiring specialized chip architectures.
“The fundamental nature of software has changed,” Huang stated, noting that AI adoption was still in its early stages.
Nvidia remains the dominant force in the high-end chip market, making it central to the AI investment strategies of companies like Microsoft. Its stock has surged over 400% in the past two years, pushing its market valuation past $3 trillion.
The company is rapidly scaling production of its latest Blackwell chips, a key driver behind its revenue growth. According to CFO Colette Kress, Nvidia’s AI data center business remains strongest in the US, with growing demand from regions such as France and the European Union.
In contrast, demand in China remains subdued due to US trade restrictions limiting Nvidia’s ability to export certain chips. Kress indicated that shipments to China are expected to remain at current levels.
