Chinese AI groups are rapidly closing the performance gap with established U.S. titans such as Nvidia (NVDA).
DeepSeek Climbs the Charts
According to new figures from benchmarking and consultancy firm Artificial Analysis, Chinese new kids on the block such as DeepSeek are making inroads thanks to their significantly lower prices as well as operational capabilities.
The figures found that DeepSeek’s reasoning model R1 scored 60 on the Artificial Analysis Intelligence Index. That score made it the third most intelligent AI model in the world, behind ChatGPT maker OpenAI’s o1 and o1-mini, which scored 62 and 66, respectively. The index evaluated model performance across a variety of intelligence and reasoning data sets.
In terms of pricing for developers, DeepSeek-R1 ranked eighth globally, while OpenAI’s GPT-4.5 and o1 were listed as the two most expensive models.
U.S. Under Pressure
In a recent post by Artificial Analysis on X, as reported by The South China Morning Post, the group stated: “One year ago, the AI frontier was overwhelmingly dominated by U.S. companies. Today, nearly a dozen Chinese companies have models matching or exceeding current-generation models from most U.S. labs.”
Given the recent mood music coming from the Chinese government in Beijing and President Xi, state support and investment is set to ramp up to help more Chinese firms make technological breakthroughs. This is partly down to the need to bolster a slowing domestic economy but mainly to take on the U.S. in the AI race, particularly in an era of uncertainty over tariffs and trade.
The emergence of DeepSeek’s model in January rattled the share price of established semiconductor groups like Nvidia, and any advance in the ability of their Chinese rivals will be a concern. NVDA stock was down again today. However, earlier this week, fellow semiconductor group Advanced Micro Devices (AMD) stated that it was already working with DeepSeek and believes this could be extended further in the months ahead.
Is NVDA a Good Stock to Buy Now?
On TipRanks, NVDA has a Strong Buy consensus based on 39 Buy and 3 Hold ratings. Its highest price target is $220. NVDA stock’s consensus price target is $176.54 implying an 52.33% upside.
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