Nvidia suffering investor’s fears. Broadcom with a more diversified portfolio in the AI race.

If massive AI chip spending is difficult to justify in the future, Nvidia would probably be in a difficult position. One of the reasons why DeepSeek created an earthquake last week was because of the possibility of “cheaper AI”. Any deal offering the same quality for a cheaper price, easily becomes a no-brainer. DeepSeek made the imagination go directly to consider that kind of future, where the required investment in hardware to train AI models is more affordable, and AI is still part of the present and future for society. The Chinese company DeepSeek is the elephant in the room for Nvidia, making tangible the possibility to have a large language model (LLM) that could no longer require the latest and most expensive hardware. Even in the hypothetical scenario that what DeepSeek produced is not as powerful as what the American companies have in the field of AI, or if there are legal issues of copyright infringement, DeepSeek has at least offered a Proof Of Concept (POC). That could be problematic for Nvidia’s future because even if DeepSeek is no longer in business in the future, new companies could emerge trying to offer “cheaper or more affordable AI”. The exponential growth trajectory that Nvidia has been experiencing since approximately the end of 2022, may come to an end in 2025. It might be extreme to think this was a bubble and that Nvidia will crash. But at least it can be said with tangible results and real data, that since 24 Jan 2025, Nvidia’s stock price has been in alarming decline. It is not a coincidence that the dates perfectly match the emergence of the news regarding DeepSeek and its artificial intelligence open-source LLMs.

Broadcom is maintaining its dominant position in the AI race and revolution. It is interesting to observe how for now, Broadcom’s future still looks bright and it may have less public scrutiny and concerns than what Nvidia is experiencing regarding the fears after the emergence of the Chinese startup, DeepSeek. Part of the advantage of Broadcom might be that their business model is not exclusively relying on the AI market. Broadcom also offers mainframe software, virtual desktops (the acquisition of VMware was completed in late 2023), and AI-powered products.