Nvidia Chips Are Losing Out in One Key Market. DeepSeek Lays Bare a Missed Opportunity. -- Barrons.com

Dow Jones15:24

By Adam Clark

Nvidia faces fierce competition in the artificial-intelligence chip market all around the world. But the most immediate threat is in China, where a new AI model from DeepSeek is showing the shift to domestic processors.

Chinese AI developer DeepSeek launched preview versions of its V4 model on Friday. The release has been eagerly anticipated after a predecessor model shocked the market last year by showing advanced capabilities at an apparently cheap training cost.

Notably, DeepSeek looks to have turned primarily to China's Huawei Technologies for the hardware behind its latest release. Huawei said in a WeChat post that its entire Ascend AI chip line now offers full-stack support for DeepSeek V4 models, although DeepSeek said it validated one of V4's key efficiency techniques on both Nvidia graphics-processing units and Huawei's chips.

Nvidia has been hampered in China by tensions between Washington and Beijing. Nvidia CEO Jensen Huang said last month that the company had restarted manufacturing of its H200 processors for sale in China and that it had received orders from many customers. However, he didn't specify how much revenue the company expected to generate.

Huang previously said China represents a $50 billion market for AI infrastructure, growing at 50% a year. If authorities permit widespread sales then Chinese companies would be willing to buy around 1.5 million of the H200 chips this year, representing roughly $30 billion in revenue, according to KeyBanc analyst John Vinh.

Nvidia shared fell 0.1% in Thursday's after-hours session.

Write to Adam Clark at adam.clark@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

 

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April 24, 2026 03:24 ET (07:24 GMT)

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