If the DeepSeek results are indeed accurate, NVIDIA could find itself in a similar situation to what Cisco faced after the dot-com bubble burst in the early 2000s.

When the dot.com bubble burst, Cisco became a major supplier of networking equipment, driven by a wave of demand from startups and tech companies trying to build internet infrastructure. When the bubble burst, many of these companies went bankrupt, and the market was flooded with second-hand Cisco equipment. The demand for new hardware evaporated, and Cisco’s hyper-growth stalled for years.

In NVIDIA’s case, the booming AI industry has created a huge demand for GPUs, and startups and big techs have invested billions of dollars in these hardware. Many AI startups have purchased thousands of NVIDIA GPUs to train their models and launch their products.

If DeepSeek eliminates the need for such hardware or causes these startups to fail widely, it is possible that second-hand NVIDIA GPUs will flood the market, repeating Cisco’s post-bubble scenario.

*DeepSeek’s Key Impacts on NVIDIA*

- *Bankrupt Startups Flooding the Market* : Many AI startups with large NVIDIA GPU inventories may collapse and be forced to liquidate their hardware, reducing the value of new GPUs.

- *NVIDIA GPU Leasing Data Center Startups:* May not be able to generate sufficient returns on their investments, further saturating the market with unused GPUs.

- *Slowdown from the Magnificent 7:* Big-tech companies, which have driven much of NVIDIA’s growth, may slow or completely stop purchasing GPUs, citing thousands of existing GPUs that are already underutilized and sitting idle in warehouses.

*Why Does This Relate to Cisco?*

*Overproduction and Oversupply:* Both companies thrived during periods of speculative growth, producing unprecedented levels of hardware to meet demand. When demand collapsed, they faced oversaturated markets.

*Startup Dependency:* Just as Cisco was dependent on dot-com companies, NVIDIA is inherently dependent on the success of high-risk AI startups.

*Market Flooded with Used Products* For Cisco, companies that went bankrupt flooded the market with used equipment. For NVIDIA, a similar flood of GPUs could significantly reduce demand for new hardware.

*Growth Stalling* Cisco’s dominance is a sign of declining It has followed years of slow growth due to backorders. NVIDIA could face a similar fate if demand from both startups and tech giants wanes.

*Broader Implications for the Industry*

- Companies that rely on expensive GPUs could shift to new AI products, pushing NVIDIA into a lesser position in a transforming market.

- NVIDIA’s current valuation, inflated by AI hype, could face a significant correction if growth slows and the aftermarket undermines new sales.

- Other companies in the AI ​​hardware ecosystem that are directly dependent on NVIDIA’s dominance could also be affected.

NVIDIA has been at the forefront of AI growth, as Cisco was during the internet revolution. But history has shown that over-reliance on speculative demand and an oversaturated market can strain even the most dominant companies. DeepSeek’s potential to change the AI ​​landscape could be the beginning of NVIDIA’s own “post-bubble” reckoning.

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