Unless the world demand for these raw material goes down or production elsewhere goes up someone will still buy these raw materials. If tarriff is high enough to force US to source from and Canada to sell to more distant places the world will be less efficient.
The key question is: has demand elasticity increased for Nvidia cards? An increase in elasticity means people are more willing to wait for hardware price to drop because they can do more with existing hardware. Elasticity could increase even if demand is still growing. Not all growths are equally profitable. Current high prices are extremely profitable for Nvidia. If elasticity is increasing future growth may not be as profitable as the projection from when Deepseek was relatively unknown.
You are not taking into account why people are willing to pay exceedingly high prices for GPUs now and that the underlying reason may have been taken away.
It doesn't make sense to compare individual models. A better way is to look at total compute consumed, normalized by the output. In the end what counts is the cost of providing tokens.
If you normalize Nvidia's gross margin and take into account of competitors sure. But its current high margin is driven by Big Tech FOMO. Do keep in mind that 90% margin or 10x cost to 50% margin or 2x cost is a 5x price reduction.
Because DeepSeek demonstrates that loads of compute isn't necessary for high-performing models, and so we won't need as much and as powerful of hardware as was previously thought, which is what Nivida's valuation is based on?
That's assuming there isn't demand for more powerful models, there's still plenty of room for improvement from the current generation. We didn't stop at GPT-3 level models when that was achieved.
Since intermediate steps of reasoning are hard to verify they only award final results. Yet that produces enough signal to produce more productive reasoning over time. In a way when pigeons are virtual one can afford to have a lot more of them.
