Palantir's CEO Just Said This About DeepSeek. Here's What It Could Mean for Nvidia Investors.

Alex Karp is a PhD., technologist, and philosopher. He's also the CEO of artificial intelligence (AI) software company Palantir Technologies -- and he often explains sophisticated and complicated ideas in an extremely digestible format. Recently, Karp sat down for an interview and gave his honest take on AI's newest darling, a Chinese start-up called DeepSeek.

Since DeepSeek's arrival a couple of weeks ago, tech stocks have largely fallen off a cliff. In particular, semiconductor stocks have been walloped. Below, I'll detail some of Karp's comments and explain why they're important to understand. Furthermore, I'll draw on his views to understand how DeepSeek's emergence could impact the biggest name in the chip realm, Nvidia (NASDAQ: NVDA).

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What did Alex Karp say about DeepSeek?

When OpenAI released ChatGPT in late 2022, many in the technology world suddenly bought into the idea that large language models (LLM) represented some type of breakthrough that would forever change the way businesses interacted. Alex Karp was not one of those people.

Over the last couple of years, the Palantir CEO has consistently said that LLMs, while useful, are commoditized products. During a recent interview, Karp doubled down on this idea as it relates to the DeepSeek advancement. He proclaimed that "it's much easier than people want to believe to be the second mover."

He went on to explain that DeepSeek had the luxury of training its AI models on platforms that other LLMs have been using for two years now. In a way, DeepSeek's impressive capabilities shouldn't come as too much of a surprise.

Image source: Getty Images

How do these ideas impact Nvidia?

Perhaps the biggest component of the DeepSeek storyline is that the company is claiming it built the model for significantly less money than ChatGPT and other well-known LLMs here in the U.S. While it's been hard to validate the accuracy of these comments, many journalists and leaders in the technology world have pushed back on the idea that something of DeepSeek's caliber could have been built for a fraction of what U.S. companies have been spending on AI development.

Nevertheless, many in the investment world have entered full panic mode -- hitting the sell button on Nvidia like it's going out of style. The driving force behind Nvidia's sell-off is that if DeepSeek's claims are true, demand for Nvidia's graphics processing units (GPUs) may falter.

It's unlikely that DeepSeek will suddenly disappear or that its training capabilities will somehow worsen. Karp went on to suggest that, in light of the DeepSeek development, the U.S. should "run harder, run faster" and continue its already serious investments in AI. He doesn't appear to be the only tech personality touting this idea, either.

During recent earnings calls for Meta Platforms and Microsoft, both companies made it clear that capital expenditure (capex) this year remains a core focus, given high demand for their AI services. To me, DeepSeek appears to be inspiring American technology enterprises to spend even more on their AI roadmaps. Considering both of these "Magnificent Seven" members are customers of Nvidia, I see the continued investment in AI infrastructure as a major tailwind for the chipmaker.

An extremely diluted way of thinking about the DeepSeek situation could be to see the product as yet another LLM -- as Karp essentially predicted would happen two years ago. So long as new LLMs emerge and existing platforms continue spending on training and inferencing compute, demand for Nvidia's processors should remain robust.

I see the ongoing sell-off in Nvidia as something that's rooted in fear, as opposed to prudent judgement. More importantly, long-term investors have been presented with a rare opportunity to buy the dip in Nvidia -- a stock that's gone almost exclusively upwards for more than two years now. Although the near term could remain a bit volatile, Nvidia's long-term picture still holds up and could actually become even stronger as U.S. businesses double down on their AI infrastructure.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Meta Platforms, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool has positions in and recommends Meta Platforms, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.