NVIDIA shares fell more than 2% in Tuesday pre-market trading. A Reuters report indicates Chinese startup DeepSeek is developing a custom AI inference chip.
The project threatens NVIDIA's market dominance by potentially reducing Chinese demand. DeepSeek aims to decrease its reliance on external technology providers.
The custom chip remains in early development stages. It specifically targets AI inference, the process used to run trained models.
This move mirrors strategies by OpenAI and Anthropic to build in-house hardware. These firms seek to minimize dependence on third-party suppliers like NVIDIA.