R1 made waves for two reasons:

1. It was cheap to train (maybe because they stole/“distilled” openAi’s training data).
2. It is much more efficient to run (it requires much less processing power to run at a decent speed).

I think number 2 is what hit the nVidia stock so hard. Up until the R1 release, the future of AI development would require more GPU and more power. The R1 release showed maybe that isn’t the case.

Imagine everyone is out driving around in gas powered cars that get 4MPG. Then a new cheaper gas powered car comes out that gets 60MPG. What happens to the price of gas when the 60MPG car is released? Maybe it fluctuates? Maybe it goes down (less gas is needed due to the more efficient cars)? Maybe it goes up as there are more cars on the road (due to the cheaper entry cost)? What happens if the cheaper more efficient car is electric?

Lots of people see the future of AI as being tied to the hardware and have pumped up nVidia’s stock because of that. Anything that goes against that theory will likely let some air out of nVidia’s bubble.

Lofty Pursuits was a fan too, and they made their own version!

https://www.pd.net/products/tangerine-sours-secret-pre-order