SAN FRANCISCO, Jan 27 (Reuters) - Nvidia ( NVDA ) on

Monday said Chinese AI firm DeepSeek's advances show the

usefulness of its chips for the Chinese market and more of its

chips will be needed in the future to meet demand for DeepSeek's

services.

"DeepSeek's work illustrates how new models can be created

using that technique, leveraging widely-available models and

compute that is fully export control compliant," Nvidia ( NVDA ) said in

a statement.

Nvidia ( NVDA ) shares had dropped 17% on Monday on investor concerns

the Chinese firm had matched rivals such as OpenAI using far

fewer Nvidia ( NVDA ) chips than U.S. firms. But DeepSeek was also

struggling on Monday to accommodate an influx of new users.

"Inference requires significant numbers of Nvidia GPUs and

high-performance networking," Nvidia ( NVDA ) said in a statement.