Citi questions DeepSeek not using advanced chips, keeps Buy on Nvidia

Citi analyst Atif Malik says DeepSeek’s R1, a China-made large language model, prompted investor concerns around the cost of compute as it announced to use just a fraction of its U.S. competitors’ cost and still achieved top performance. While DeepSeek’s achievement “could be groundbreaking,” Citi questions the notion that its feats were done without the use of advanced graphics processing units. The firm does not expect leading artificial intelligence companies would move away from more advanced GPUs. It sees the recent AI spending announcements like Stargate “as a nod to the need for advanced chips.” Citi maintains a Buy rating on Nvidia (NVDA) with a $175 price target The stock in premarket trading is down 12%, or $17.66, to $124.93.