Deepseek and the Jevons Paradox
https://en.m.wikipedia.org/wiki/Jevons_paradox Jevons paradox In economics, the Jevons paradox (; sometimes Jevons effect) occurs when technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application), however, as the cost of using the resource drops, overall demand increases causing total resource consumption to rise.[1][2][3][4] Governments have typically expected efficiency gains to lower resource consumption, rather than anticipating possible increases due to the Jevons paradox.[5] Nvidia is down 17%. Deepseek has released their latest R1 model which they claimed to be trained very cheaply.
Half the internet is calling it a bubble burst, the other half are rushing to buy the dip. Who is correct?
Well, that's not so easy. What would Charlie do? At this point, it's not about the fundamentals anymore. It's just to speculate about AI and the role of Nvidia.
One thing is clear, though: efficiency gains in tech tend to increase consumption. Let's see if AI also follows the Jevons Paradox.