Nvidia doesn’t expect AI compute and energy demand to slow down, calls DeepSeek response a “kneejerk” reaction
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The launch of China's AI startup DeepSeek shook investors, as its efficient model raised concerns that future data centers might not need as much energy as originally anticipated. As a result of this panic among investors, one of the biggest AI companies worldwide, Nvidia, experienced its worst stock drop. Despite this, the green team called DeepSeek an “excellent AI advancement,” as unlike the investors, Nvidia believed DeepSeek would drive greater demand for its AI hardware.
And once again, at a conference organized by the Hamm Institute for American Energy, Nvidia’s senior director of corporate sustainability, Josh Parker, said that Nvidia hasn't seen any signs of AI data center construction slowing down, and that recent players in the AI space have only sparked a rise in energy demand.
Amazon and Nvidia haven’t seen a pullback
Previously, we've heard similar statements from Nvidia’s CEO, Jensen Huang, who believes that DeepSeek has popularized reasoning models that will require more chips. He added that, as we enter “the beginning of the reasoning AI era,” the demand for computing power is expected to grow substantially. In fact, Nvidia predicts that data center builds will exceed $1 trillion in expenses by 2027, almost four times the current figures.
So it makes sense when Parker describes the reaction to DeepSeek as “kneejerk,” since the opposite of what investors feared is happening. This is evident from Anthropic co-founder Jack Clark, who stated that 50 gigawatts of new power capacity will be needed by 2027 to support AI, which is equivalent to about 50 new nuclear plants.
“Anthropic and the other AI companies, what we're seeing is tremendous growth in the need for new baseload power. We're seeing unprecedented growth.”
Josh Parker, senior director of corporate sustainability, via CNBC
Amazon's vice president of global data centers, Kevin Miller, also seems to be on the same page as Nvidia, saying, “We continue to see very strong demand, and we're looking both in the next couple of years as well as long term, seeing the numbers only going up.”
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