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Dado Ruvic | Reuters

DeepSeek has rattled the U.S.-led AI ecosystem with its latest model, shaving hundreds of billions in chip leader Nvidia’s market cap. While the sector leaders grapple with the fallout, smaller AI companies see an opportunity to scale with the Chinese startup.

Several AI-related firms told CNBC that DeepSeek’s emergence is a “massive” opportunity for them, rather than a threat. 

“Developers are very keen to replace OpenAI’s expensive and closed models with open source models like DeepSeek R1…” said Andrew Feldman, CEO of artificial intelligence chip startup Cerebras Systems.

The company competes with Nvidia’s graphic processing units and offers cloud-based services through its own computing clusters. Feldman said the release of the R1 model generated one of Cerebras’ largest-ever spikes in demand for its services. 

“R1 shows that [AI market] growth will not be dominated by a single company — hardware and software moats do not exist for open-source models,” Feldman added. 

Open source refers to software in which the source code is made freely available on the web for possible modification and redistribution. DeepSeek’s models are open source, unlike those of competitors such as OpenAI.

DeepSeek also claims its R1 reasoning model rivals the best American tech, despite running at lower costs and being trained without cutting-edge graphic processing units, though industry watchers and competitors have questioned these assertions.

“Like in the PC and internet markets, falling prices help fuel global adoption. The AI market is on a similar secular growth path,” Feldman said. 

Inference chips 

DeepSeek could increase the adoption of new chip technologies by accelerating the AI cycle from the training to “inference” phase, chip start-ups and industry experts said.

Inference refers to the act of using and applying AI to make predictions or decisions based on new information, rather than the building or training of the model.

“To put it simply, AI training is about building a tool, or algorithm, while inference is about actually deploying this tool for use in real applications,” said Phelix Lee, an equity analyst at Morningstar, with a focus on semiconductors.  

While Nvidia holds a dominant position in GPUs used for AI training, many competitors see room for expansion in the “inference” segment, where they promise higher efficiency for lower costs.

AI training is very compute-intensive, but inference can work with less powerful chips that are programmed to perform a narrower range of tasks, Lee added.

A number of AI chip startups told CNBC that they were seeing more demand for inference chips and computing as clients adopt and build on DeepSeek’s open source model. 

“[DeepSeek] has demonstrated that smaller open models can be trained to be as capable or more capable than larger proprietary models and this can be done at a fraction of the cost,” said Sid Sheth, CEO of AI chip start-up d-Matrix. 

“With the broad availability of small capable models, they have catalyzed the age of inference,” he told CNBC, adding that the company has recently seen a surge in interest from global customers looking to speed up their inference plans. 

Robert Wachen, co-founder and COO of AI chipmaker Etched, said dozens of companies have reached out to the startup since DeepSeek released its reasoning models.

“Companies are [now] shifting their spend from training clusters to inference clusters,” he said. 

“DeepSeek-R1 proved that inference-time compute is now the [state-of-the-art] approach for every major model vendor and thinking isn’t cheap – we’ll only need more and more compute capacity to scale these models for millions of users.”

Jevon’s Paradox 

Analysts and industry experts agree that DeepSeek’s accomplishments are a boost for AI inference and the wider AI chip industry. 

“DeepSeek’s performance appears to be based on a series of engineering innovations that significantly reduce inference costs while also improving training cost,” according to a report from Bain & Company.

“In a bullish scenario, ongoing efficiency improvements would lead to cheaper inference, spurring greater AI adoption,” it added. 

This pattern explains Jevon’s Paradox, a theory in which cost reductions in a new technology drive increased demand.

Financial services and investment firm Wedbush said in a research note last week that it continues to expect the use of AI across enterprise and retail consumers globally to drive demand.

Speaking to CNBC’s “Fast Money” last week, Sunny Madra, COO at Groq, which develops chips for AI inference, suggested that as the overall demand for AI grows, smaller players will have more room to grow.

“As the world is going to need more tokens [a unit of data that an AI model processes] Nvidia can’t supply enough chips to everyone, so it gives opportunities for us to sell into the market even more aggressively,” Madra said.

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Google hires Windsurf CEO Varun Mohan, others in latest AI talent deal

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Google hires Windsurf CEO Varun Mohan, others in latest AI talent deal

Chief executive officer of Google Sundar Pichai.

Marek Antoni Iwanczuk | Sopa Images | Lightrocket | Getty Images

Google on Friday made the latest a splash in the AI talent wars, announcing an agreement to bring in Varun Mohan, co-founder and CEO of artificial intelligence coding startup Windsurf.

As part of the deal, Google will also hire other senior Windsurf research and development employees. Google is not investing in Windsurf, but the search giant will take a nonexclusive license to certain Windsurf technology, according to a person familiar with the matter. Windsurf remains free to license its technology to others.

“We’re excited to welcome some top AI coding talent from Windsurf’s team to Google DeepMind to advance our work in agentic coding,” a Google spokesperson wrote in an email. “We’re excited to continue bringing the benefits of Gemini to software developers everywhere.”

The deal between Google and Windsurf comes after the AI coding startup had been in talks with OpenAI for a $3 billion acquisition deal, CNBC reported in April. OpenAI did not immediately respond to a request for comment.

The move ratchets up the talent war in AI particularly among prominent companies. Meta has made lucrative job offers to several employees at OpenAI in recent weeks. Most notably, the Facebook parent added Scale AI founder Alexandr Wang to lead its AI strategy as part of a $14.3 billion investment into his startup. 

Douglas Chen, another Windsurf co-founder, will be among those joining Google in the deal, Jeff Wang, the startup’s new interim CEO and its head of business for the past two years, wrote in a post on X.

“Most of Windsurf’s world-class team will continue to build the Windsurf product with the goal of maximizing its impact in the enterprise,” Wang wrote.

Windsurf has become more popular this year as an option for so-called vibe coding, which is the process of using new age AI tools to write code. Developers and non-developers have embraced the concept, leading to more revenue for Windsurf and competitors, such as Cursor, which OpenAI also looked at buying. All the interest has led investors to assign higher valuations to the startups.

This isn’t the first time Google has hired select people out of a startup. It did the same with Character.AI last summer. Amazon and Microsoft have also absorbed AI talent in this fashion, with the Adept and Inflection deals, respectively.

Microsoft is pushing an agent mode in its Visual Studio Code editor for vibe coding. In April, Microsoft CEO Satya Nadella said AI is composing as much of 30% of his company’s code.

The Verge reported the Google-Windsurf deal earlier on Friday.

WATCH: Google pushes “AI Mode” on homepage

Google pushes "AI Mode" on homepage

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Nvidia’s Jensen Huang sells more than $36 million in stock, catches Warren Buffett in net worth

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Nvidia's Jensen Huang sells more than  million in stock, catches Warren Buffett in net worth

Jensen Huang, CEO of Nvidia, holds a motherboard as he speaks during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, on June 11, 2025.

Gonzalo Fuentes | Reuters

Nvidia CEO Jensen Huang unloaded roughly $36.4 million worth of stock in the leading artificial intelligence chipmaker, according to a U.S. Securities and Exchange Commission filing.

The sale, which totals 225,000 shares, comes as part of Huang’s previously adopted plan in March to unload up to 6 million shares of Nvidia through the end of the year. He sold his first batch of stock from the agreement in June, equaling about $15 million.

Last year, the tech executive sold about $700 million worth of shares as part of a prearranged plan. Nvidia stock climbed about 1% Friday.

Huang’s net worth has skyrocketed as investors bet on Nvidia’s AI dominance and graphics processing units powering large language models.

The 62-year-old’s wealth has grown by more than a quarter, or about $29 billion, since the start of 2025 alone, based on Bloomberg’s Billionaires Index. His net worth last stood at $143 billion in the index, putting him neck-and-neck with Berkshire Hathaway‘s Warren Buffett at $144 billion.

Shortly after the market opened Friday, Fortune‘s analysis of net worth had Huang ahead of Buffett, with the Nvidia CEO at $143.7 billion and the Oracle of Omaha at $142.1 billion.

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The company has also achieved its own notable milestones this year, as it prospers off the AI boom.

On Wednesday, the Santa Clara, California-based chipmaker became the first company to top a $4 trillion market capitalization, beating out both Microsoft and Apple. The chipmaker closed above that milestone Thursday as CNBC reported that the technology titan met with President Donald Trump.

Brooke Seawell, venture partner at New Enterprise Associates, sold about $24 million worth of Nvidia shares, according to an SEC filing. Seawell has been on the company’s board since 1997, according to the company.

Huang still holds more than 858 million shares of Nvidia, both directly and indirectly, in different partnerships and trusts.

WATCH: Nvidia hits $4 trillion in market cap milestone despite curbs on chip exports

Nvidia hits $4 trillion in market cap milestone despite curbs on chip exports

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Tesla to officially launch in India with planned showroom opening

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Tesla to officially launch in India with planned showroom opening

Elon Musk meets with Indian Prime Minister Narendra Modi at Blair House in Washington DC, USA on February 13, 2025.

Anadolu | Anadolu | Getty Images

Tesla will open a showroom in Mumbai, India next week, marking the U.S. electric carmakers first official foray into the country.

The one and a half hour launch event for the Tesla “Experience Center” will take place on July 15 at the Maker Maxity Mall in Bandra Kurla Complex in Mumbai, according to an event invitation seen by CNBC.

Along with the showroom display, which will feature the company’s cars, Tesla is also likely to officially launch direct sales to Indian customers.

The automaker has had its eye on India for a while and now appears to have stepped up efforts to launch locally.

In April, Tesla boss Elon Musk spoke with Indian Prime Minister Narendra Modi to discuss collaboration in areas including technology and innovation. That same month, the EV-maker’s finance chief said the company has been “very careful” in trying to figure out when to enter the market.

Tesla has no manufacturing operations in India, even though the country’s government is likely keen for the company to establish a factory. Instead the cars sold in India will need to be imported from Tesla’s other manufacturing locations in places like Shanghai, China, and Berlin, Germany.

As Tesla begins sales in India, it will come up against challenges from long-time Chinese rival BYD, as well as local player Tata Motors.

One potential challenge for Tesla comes by way of India’s import duties on electric vehicles, which stand at around 70%. India has tried to entice investment in the country by offering companies a reduced duty of 15% if they commit to invest $500 million and set up manufacturing locally.

HD Kumaraswamy, India’s minister for heavy industries, told reporters in June that Tesla is “not interested” in manufacturing in the country, according to a Reuters report.

Tesla is looking to recruit roles in Mumbai, job listings posted on LinkedIn . These include advisors working in showrooms, security, vehicle operators to collect data for its Autopilot feature and service technicians.

There are also roles being advertised in the Indian capital of New Delhi, including for store managers. It’s unclear if Tesla is planning to launch a showroom in the city.

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