SAN FRANCISCO (Reuters) - Nvidia 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 said in a statement.

Nvidia shares had dropped 17% on Monday on investor concerns the Chinese firm had matched rivals such as OpenAI using far fewer Nvidia 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 said in a statement.