What on Earth is going on with the tech stocks? What on Earth is going on with this AI I hear about coming out of China, and what does that mean for the jewelry industry?

That's what we're getting into today in this video. My name is Jesse Korby, I will be your host, and let's just get right into it because unless you've been living under a rock, you probably heard about $1 trillion in enterprise value getting wiped off the stock market in one day. Look it up—it's a crazy thing happening in the world of tech.

And if it's a crazy thing happening in the world of tech, it's affecting governments, it's affecting every industry on Earth, and it's certainly affecting you. So we want to understand what this is, why it's happening, and what it means for you.

And spoiler alert—it's actually great news. That's the beautiful thing—it's great news.

So we're here to talk about a model called R1 by DeepSeek, which is a Chinese AI lab. We're not here to get political. I'm not going to tell you anything that I think could be going on behind the scenes beyond what is told in mainstream channels and so on.

We're here to just talk about the business side. Just know that if you go down the rabbit hole of what's going on here, it seems like some pretty sophisticated stuff—that's all I'm going to say.

So what we're here to talk about is R1—this really, really advanced AI model. That's all you need to know for now. It is able to reason at a level that's comparable to the best model from OpenAI, who released ChatGPT.

So they're kind of the market leader in the world for AI, and a small lab that was allegedly doing this as a side project was able to create a new method of AI learning—or apply existing methods of AI learning—and train a model in a special way that made it way cheaper and faster to create something that is around, I believe, 90% cheaper to operate than Q* (which is the reasoning model from OpenAI).

What does that mean? Well, it means that a lot of people thought, "Hey, this isn’t good for the technology investments we’ve made."

So if you look it up, a lot of tech stocks really suffered and plummeted. That $1 trillion in enterprise value decline is an actual real thing that happened.

A big thing that people are asking is: Is NVIDIA going to be okay now that this cheap AI model came out and billions of dollars have been put into these big US companies? Is the time over for NVIDIA, who makes the hardware that these AI applications run on?

Spoiler alert—NVIDIA is going to be awesome.

This is not financial advice, but if you look into something called Jevon’s Paradox, this is a principle that we are going to discuss here.

Jevon’s Paradox is why NVIDIA is ultimately going to do awesome as a provider of hardware that runs AI devices. And they have their own AI models and lots of other cool stuff happening at NVIDIA.

So let’s get into it.

What is Jevon’s Paradox?

Basically, Jevon’s Paradox means that if technology becomes cheap and efficient, we're just going to get more of it. If it’s cheap and efficient, we’re going to get more of it.

And if you think of the market as a pie, it basically just means that we’re going to get a bigger pie, faster.

That’s what Jevon’s Paradox is, and that is certainly what the tech community that is in the know sees R1 as.

If we could make this tangible and real for somebody in the jewelry industry who might not follow the tech space as much, we need to be aware of how this is going to affect us.

A good example I would bring into the fold is video cameras.

A lot of people in the jewelry industry have been operating in this industry since the ‘80s. Think about video cameras in the ‘80s—that would have been quite the splurge. That would have been an expensive piece of equipment, maybe between $3,000 and $5,000 pre-inflation in Reagan-era America.

That’s a lot of money for a video camera that would have been this big, and you would have been shooting your home movies on a VHS tape.

Now, everybody has a video camera on their phone.

I’m shooting this video on a phone camera that has been made very, very affordable because it became cheaper and more efficient to make these cameras—and then we just got better cameras.

This is a way better camera than what would have been filming me in the ‘80s, and it’s on a phone that can make phone calls, run computer applications, and do all that crazy stuff that a smartphone can do.

So that is a great illustration of Jevon’s Paradox.

Surely, if you’re holding a smartphone in your hand watching this video (or at least have one within reach), you’ve probably taken a camera video before—or really great photos that are better than a lot of cameras now.

That’s Jevon’s Paradox.

We also have witnessed this with lab diamonds.

The reason that lab diamonds keep taking over the market is because we are getting better at making them. The facilities developing them are getting more efficient, and it’s making them cheaper.

So guess what’s happening with lab diamonds? There’s more of them.

About half of diamond sales in 2024 were lab diamonds as opposed to natural, up from about 11% just a few years before—and it’s because of Jevon’s Paradox.

So when people bring up the natural diamond market and say, "People are just going to want to spend more money on a better gift, and we’re not going to have lab diamonds taking over this much longer"—that is a pipe dream. That is not real.

Jevon’s Paradox would say that lab diamonds are definitely going to keep making a bigger pie, faster, because they’re cheaper and more efficient to make.

That is also going to happen with AI solutions.

If we think of the big providers like OpenAI, DeepSeek in China, Anthropic, Meta, or Amazon AWS (which has its own AI models coming out), everybody in big tech wants a powerful AI model.

What’s special about R1—before we all freak out about the China thing in America—is that this model has been open-sourced.

It’s something you can download and run on a local computer. Most powerful consumer-grade computers could run this model.

Then, all of a sudden, everybody’s got access to the best stuff.

So if you are an AI-first consulting organization, such as Jeweler’s Advantage, you get to benefit from this increase in efficiency, lower cost, and better quality.

And then companies like mine can pass that on to you—the jeweler who is now empowered by even better AI.

So this is actually really, really good news.

Of course, the stock market does what the stock market does, and something new happens, so we all freak out. But NVIDIA is actually going to be a huge winner in the long run.

Because, just like video cameras became cheaper and more efficient, that same principle applies to supercomputers—something that can run an advanced AI model.

And NVIDIA already has those out in the market.

Regular people will soon be able to run super-advanced AI models from their homes.

So basically, if you're a small business owner, you're going to be able to have the jewelry business of the future.

So the big takeaway here for you is: This is Jevon’s Paradox.

Remember that term so you can explain why the world is changing—and why this is good for the little guy.

If your uncle is freaking out about the stock market, just tell him: "Hey, man, it’s going to be all right. NVIDIA is going to be just fine."

The competition between these advanced companies will eventually result in an open-source model that raises the bar for everyone.

And while the big guys are freaking out—we all get to win together.

This is a beautiful thing.

This is the happiest I’ve ever been making one of these videos because it means that the things we’ve been dreaming about in the jewelry industry with AI—we know they can happen this year with AI.

So, like, comment, and subscribe.

My name is Jesse Korby here at Jeweler’s Advantage, and we will see you in the next one.