Taleb believes that the recent drop in NVIDIA stock prices, which dragged down the whole U.S. stock market, might be the start of a more pronounced fall in Nvidia’s market cap and the AI sector.
Nassim Taleb Warns About AI's Bubble Bursting: 'This Is the Beginning'
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Black Swan’s Nassim Taleb Warns Nvidia’s Losses Could Mark the Start of a Larger AI Sector Fall
The artificial intelligence (AI) industry has been upended recently, and stock markets, including Nvidia, a top AI chip company, have also felt this effect. Nassim Taleb, author of The Black Swan, hinted that the rise of Deepseek, an AI company of Chinese origin, can mark the start of an adjustment in the AI market.
Deepseek’s alleged cheaper and more efficient AI models can be the catalyst for this change, stated Taleb, who believes there might be more losses coming.
The implications of this technology, and the allegations that it was developed with a budget that is a tiny fraction of what companies like Openai are spending, brought the market down.
The losses came as investors project a reduced demand for power and hardware dedicated as this new development is examined.
Considering a probable reduction in the projected needs for the AI industry, Taleb asseverated:
This is the beginning. The beginning of an adjustment of people to reality. Because now they realize, now, it’s no longer flawless. You have a small little chip on the glass.
Taleb stated that the company, and by extension the whole AI market, might lose two or three times the value that it has already lost. Nvidia alone lost close to $600 billion, an 18% of its valuation last Monday, establishing a new record in losses for U.S. stock markets.
In addition, Taleb criticized the level of investments that Nvidia and other Al-focused firms have garnered from investors, who have little to no idea about the inner workings of these companies. He qualified these tech firms as “gray swans,” due to the level of volatility these might experience in just a day.
Read more: Deepseek’s AI Revolution Sparks Chaos in Crypto and US and European Stock Markets
