Microsoft CEO Satya Nadella believes that DeepSeek will inevitably help the American AI industry rather than hurt it. Microsoft chief executive Satya Nadella isn’t pressed about Chinese AI startup DeepSeek’s recent success.

The Microsoft CEO cited Jevons paradox, which stipulates increased efficiency in production drives increased demand.

Chinese AI startup DeepSeek's model led to increased scrutiny on Microsoft's AI spending.

The Microsoft CEO will have to perform a delicate balancing act over the next four years to keep his company from becoming a target.

Meta, Nvidia, and other tech giants react to DeepSeek's competitive, cost-efficient models that challenge established market players.

In an apparent response to the attention on a new AI model out of China, Microsoft CEO Satya Nadella posted online

Microsoft CEO Satya Nadella discusses Jevons Paradox, noting that improved efficiency in AI may boost its demand and make it a commodity. However, this could also lead to increased energy consumption as AI performs a wider range of tasks.

Microsoft has forecast disappointing growth in its cloud computing business, sending its shares down 4.5% in after-hours trading as investors worry about big spending, elusive artificial intelligence revenue and competition from cheaper AI models from China.

Microsoft CEO Satya Nadella had the quote of the week in response to a question from CNBC's Andrew Ross Sorkin about Elon Musk questioning the ability of the new Stargate Project's financial backers to invest up to $500 billion in AI infrastructure.

Chinese AI chatbot DeepSeek has displaced OpenAI’s ChatGPT as the most downloaded app on the Apple App store and the market is panicking. Stocks for major AI connected companies like NVIDIA fell on Monday morning following the news.

As with Jevons Paradox, efficiency gains should send AI use soaring as costs drop. As Microsoft’s Satya Nadella observed, what the steam engine did to coal demand is now likely to happen with AI.