Elon Musk is skeptical about China's DeepSeek that wiped billions off US stock market; here's why
Elon Musk remains sceptical about China's DeepSeek AI chatbot, which caused a $500 billion drop in Nvidia’s market cap. Musk doubts DeepSeek’s claims of using only 10,000 GPUs, agreeing with concerns about US export controls, and dismissing the startup’s success as overstated.
FollowIn recent days, China’s AI startup, DeepSeek, has made waves after launching a generative AI chatbot that reportedly rivals the capabilities of leading US companies, but for a fraction of the investment. This breakthrough technology caused a significant drop in the market value of US chipmaker Nvidia, with over $500 billion wiped off its market cap on January 27, 2025.
The news about DeepSeek’s chatbot shook the global tech scene, particularly after claims emerged that the Chinese AI could match the progress of top US AI companies with much lower costs. The chatbot’s potential led to a great deal of speculation about China’s ability to challenge the US’s dominance in the fast-growing AI industry. However, Elon Musk, the CEO of Tesla and SpaceX, has expressed doubt about the hype surrounding DeepSeek’s claims.
Chinese AI chatbot DeepSeek impresses with performance but offers government-lined answers on sensitive topics
Musk recently responded to comments made by Scale AI CEO, Alexandr Wang, who suggested that DeepSeek might be using around 50,000 of Nvidia’s high-performance GPUs, despite the company’s official claim of having just 10,000. Musk agreed with Wang’s perspective, adding that DeepSeek likely has far more powerful Nvidia Hopper GPUs than it admits, especially due to the restrictions imposed by US export controls. According to Musk and Wang, DeepSeek may not be able to reveal the actual number of GPUs it is using, as those are covered by US export policies.
Wang's remarks about DeepSeek having up to 50,000 Nvidia H100 GPUs were made in an interview, where he explained that due to these export controls, the Chinese startup could not disclose the full extent of its capabilities. Musk later responded on social media, agreeing with Wang's observation by simply posting "Obviously."
But Musk wasn't done. When Salesforce CEO Marc Benioff posted about DeepSeek surpassing ChatGPT on the App Store, Musk took to Twitter to express his skepticism. Benioff highlighted how DeepSeek managed to build a successful AI chatbot without needing NVIDIA supercomputers or hundreds of millions in investments. He claimed that the true value of AI now lies in data and metadata, which DeepSeek was able to harness. Musk, however, dismissed Benioff's comment by writing “Lmao no,” showing that he wasn’t convinced by the claims.
Chinese AI wave hits Wall Street: Nvidia loses $500 billion as DeepSeek shakes US tech market
To add fuel to the fire, Musk made a sarcastic remark about DeepSeek’s origins. When a user posted about DeepSeek’s "R1" chatbot being leaked from a lab in China, Musk responded with a laughing emoji, indirectly comparing it to the controversial origins of the COVID-19 virus.
Despite the excitement surrounding DeepSeek, Musk’s responses suggest that he is not fully convinced that the Chinese startup's AI is as revolutionary as some people believe. For now, the controversy surrounding DeepSeek and its ability to challenge US dominance in AI continues to make headlines, with Musk remaining a vocal skeptic.
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